Brand and business valuation to support a shareholder dispute
“We selected Interbrand because we knew they would be able to convey the strength of our brand to the Deloitte arbitrator. Their report was highly complementary to the analysis conducted by Morgan Stanley and I am sure played an important role in our success.”
CEO, NET-A-PORTER Group
NET-A-PORTER (‘NAP’), the first retailer to ‘crack the code’ of online luxury, had been acquired from its founders by Richemont, the global luxury conglomerate. Four years later, Richemont sold the NAP branded business for £950 million to YOOX, an Italian online retailer. NAP’s founders and minority shareholders disagreed over this valuation and were entitled to take this into an arbitration process.
The shareholders instructed Morgan Stanley to value the NAP Group’s business and brought Interbrand in to conduct a valuation of the NAP Group’s three key brands and branded businesses: NET-A-PORTER, MR PORTER and THE OUTNET. Their concern was that the power of the NAP brand, in particular, would not be fully appreciated by the arbitrator (the head of valuation at one of the Big 4 accounting firms) and they wanted Interbrand to bridge the gap between brand and business valuation.
Our role was as much about creating a compelling articulation of the strength of the NAP Group brands as it was about the valuation itself, although both were critical. We needed to ensure that the arbitrator really understood the brand, beyond just looking at financial forecasts and business plans.
Our brand-focused valuation approach complemented business valuation analysis by Morgan Stanley, which combined to successfully argue for an increased business valuation of, according to media reports, £1.45bn (a £500m increase).