Page 4 - The Katten Kattwalk - Fall 2024 - Issue 28
P. 4
Always in Style:
Key Considerations in
Buying and Selling
Fashion Brands
By Ilana N. Lubin
hile interest in buying and selling property is purchased or when a party is making a
fashion brands and their associated capital contribution of intellectual property to a joint
business lines is constant, structuring venture. Tax regulations relating to intangibles could
W and negotiating these opportunities also apply.
is uniquely challenging. Here, we present key initial 3. Couture Techniques: Evaluating the Impact of
considerations for anyone sitting on either side of
the table. Acquired Assets
Where the buying or selling of a brand in and of itself
1. Stitching It All Together: Transaction Structure
essentially speaks to the disposition of an intellectual
Transactions can take the form of a stock sale property portfolio, contracts such as licenses and
or asset sale and frequently are a hybrid, with distribution agreements typically attach to the asset
negotiations centered on the appropriate scope. portfolio (and can be the key assets in evaluating
In this regard, engaging accountants, operational a transaction with an operator). These agreements
personnel and attorneys in the due diligence can have both immediate and long-term economic
process earlier in the transaction timeline can impacts. The inclusion of additional operational
serve to clear the path for a more precisely defined assets in a transaction — ranging from inventory to
transaction perimeter and efficient negotiation. retail leases or warehouse spaces — further expands
Transactions also often include a concurrent bespoke deal terms.
licensing component, either back to the seller or
other operator(s) 4. Elevated Design: Major Diligence for Minority
Investments
2. Weaving Through the Numbers: Intellectual Minority investments in growth brands looking to
Property and Tax
scale demand a nuanced analysis as well. While
While tax guidance is essential for any merger or brand owners will first isolate the economic impact
acquisition, an early consultation with tax counsel on their ownership interest by admitting additional
is critical when it comes to the buying, selling or stakeholders, it’s important to consider what, if any,
investing in brands. Notably, special considerations services a minority partner is able — and will agree —
arise if a portion of an interest in intellectual to provide. For instance, does the prospective partner
4 katten.com/fashionlaw
