We were recently asked to comment on the naming implications of the sale of the Liz Claiborne brand to JC Penny. Check it out below!
Via Upstart Biz Journal (Previously Portfolio.com)
By Teresa Novellino
Upstart Business Journal Entrepreneurs & Enterprises Editor
October 17, 2011
After five unprofitable years, Liz Claiborne Inc. sold off its namesake brand to repay its debts and is now looking to attract a richer consumer with a trio ofhigher-end brands. The only thing it’s missing? A new name.
The company, which owns Juicy Couture, Kate Spade, and Lucky Brand, agreed Wednesday to sell its namesake department-store label to J.C. Penney for $267.5 million. It also previously jettisoned some other brands, including Monet, also sold to Penney’s, its Mexx division, which is being sold to the Gores Group, the Dana Buchman label, which is being acquired by Kohl’s.
These, and some other similar shifts, have helped the company raise $471 million, virtually all of which will be used to pay down debt, notes Women’s Wear Daily. Wall Street seemed to approve, and Liz Claiborne stock was up 34.1 percent after the announcement, to $6.84, and was trading above $7 this morning.
But now that the company’s fortunes seem to be turning around, what can it do about its name? And how should an existing company or a startup go about developing a name, anyway? We came up with five questions for brand naming and strategy specialist Scott Milano, owner and managing director of Tanj Branding LLC, a New York City-based consultancy. Milano came up with the names “Ally Bank,” the Nintendo “Wii” and Sony “Bravia” television.
Portfolio.com: Should Liz Claiborne Inc. choose one of its labels—Juicy Couture, Kate Spade, and Lucky Brand—and make it the umbrella name of the new company ( à la Gap, Inc.)? If it does choose one of the existing labels it already owns, should it go with the best-known brand? The most profitable one?
Milano: While focusing your attention on premium-label brands makes business sense, pinning your corporate brand to an existing label name does not make brand sense. If the leadership team has learned its lesson, it has realized the need for an entirely new umbrella name for the company. Having the verbal DNA of the Liz Claiborne name throughout all aspects of your portfolio—at the corporate and product levels—may have worked well during good times, but as soon as the company needed to sell any brands that have “Liz Claiborne” in them, their portfolio of names crumbled.
Choosing a product brand name like Juicy Couture or Kate Spade to cover the entire portfolio is like trying to make a sock into a full bodysuit: There’s just not enough stretch. Each of these brand names represents a specific market. While they have “name recognition” and the company already owns the trademarks, they are not suitable for housing the entire portfolio. Elevating one above the rest could cause damage and confusion with investors and consumers. And what happens if one day the company decides to sell the label that it has also chosen as the corporate name? It’s back to square one.
In this case, there’s no compelling reason to use the name of the company’s best-known or most profitable label brand also as its corporate name. The risks are just too high. You might be able to make a case for using one of the company’s existing names if its pulled from a stock of unused or hardly used names, or if the company went down the route of resurrecting a long-lost heritage name from its past. But without evaluating individual names, that’s a lukewarm approach at best.
So what is the benefit of a new name?
An entirely new umbrella name for the company will offer a fresh start. It will allow the company to focus its resources on its higher-end, more successful labels that will drive the business forward. It will provide the stretch and flexibility the new streamlined portfolio demands.
What goes into choosing a company name for a startup?
Choosing a company name is one of the first (and hardest) business decisions you’ll make. Without the name, you can’t move forward with starting, or building, the business. For startups, I always think finding the right name is a balance of introspection, creativity, evaluation, and just going for it.
Can you go into some more details on each of those?
Sure, here is what startups seeking a name should consider.
- Introspection: The owners must think critically about the business and envision what the brand could stand for in the market once launched. Doing your homework is key. At Tanj, we always take clients through exercises that analyze their businesses, the competitive landscapes, and the potential of their brands. This enables us to develop naming strategies that drive the creative process and help clients pick powerful names.
- Creativity: Some people are good with words; others are not. For business owners who aren’t, they should seek outside expertise for naming. Coupling a solid naming strategy with creative thinking will help generate a healthy list of ideas. But the challenges continue as soon as you try to overcome stringent trademark, linguistic, and URL hurdles.
- Evaluation: The worst situation a startup can be in is staring down a simple list of names that were cooked up on the fly and choosing a name based on whether the CEO likes it or not. It’s a recipe for disaster. You have to do your homework. At the start of the process, it’s all about the naming strategy. Once you’ve got your list of ideas, it’s all about evaluating names for legal and linguistic conflicts. You want to make sure you can legally use them in the market, and you want to avoid negative meanings or connotations in languages that are relevant to where you’re doing business. It’s also a good idea to assess the URL situation and do market testing if you have the resources. Once you have all those inputs, you’re in a much better position to make a smarter decision about the name.
- Just Going for It: At Tanj, as much as we make a brand-name development project an objective process, we understand that deciding on the final name is still a subjective decision for most business and brand owners. When push comes to shove, you have to pick a name to be in business. If you do the due diligence up front, you should feel confident when pulling the trigger on a final name at the end of the process.
For specific tips on how to develop brand names, check out one of our presentations: “You Name It: A No-Nonsense Approach to Naming Your Small Business, Product or Service with a Big Idea.”
Can you think of a company that went through a renaming and did so successfully? How did they do it?
Yes, in fact, several years ago I had the pleasure of renaming GMAC Financial to Ally Bank. They faced a number of very pressing business issues that forced the change [including, as CNN noted at the time, a desire to distance themselves from bailout-money recipient General Motors, which once wholly owned it]. But they did their due diligence up front, tried to understand where the consumer banking market was moving, and created a smart strategy for launching an entirely new bank brand during very turbulent financial times. The whole concept of an ally, or a partner you can trust, is incredibly simple yet very effective. It all starts with the name and cascades over every other aspects of the brand.