Joined: 18 Jul 2004
Posts: 59
| Posted: Thu Aug 14, 2008 1:38 am Post subject: kenmore, craftsman, diehard - intellectual property | |
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haven't seen a post on this.... but found it interesting, so decided to share... sorry if it's a repeat.... all the bonds are owned by sears owned entities... of course the bond holders is an insurance company off-shore (in Bermuda) actually -
"BusinessWeek has learned that Sears has created $1.8 billion worth of securities based on the brand names Kenmore, Craftsman, and DieHard. In essence, it has transferred ownership of the brands to another entity, which it then pays for the right to use the brands. The deal, carried off last May, was the biggest "securitization" of intellectual property in history, according to Eric Hedman, an analyst at Standard & Poor's (MHP ), which, like BusinessWeek, is a unit of The McGraw-Hill Companies. (MHP ) The story hasn't gotten out until now because the bonds haven't actually changed hands—Sears is holding them in its Bermuda-based insurance subsidiary—and because Sears has never disclosed them, nor has it had to do so. But that could change if Sears were to decide to sell them to outside investors and collect the cash." Ummm.... can anyone out there offer any insight!! |
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Joined: 09 Feb 2008
Posts: 1292
Location: Brand Central
| Posted: Thu Aug 14, 2008 1:56 am Post subject: | |
| Isn't this move part of the international licensing push? | |
Joined: 08 Jul 2003
Posts: 4780
| Posted: Thu Aug 14, 2008 1:59 am Post subject: sell becomes easier | |
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I think they started work on this in 2005.It basically makes the selling of the Sears brands more likely and easier.It also makes it easier to license out or let someone else sell those names for themselves such as Home Depot.
Worst case for SHLD,Sears Holdings is that they have an additional 1.8 BILLION in collateral for a loan.That's another reason to put a dollar value on the names. Mr ed's all about using assets for money. |
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Joined: 08 Jul 2003
Posts: 4780
| Posted: Thu Aug 14, 2008 2:11 am Post subject: A&E | |
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Sears and Roebuck sorta already did this with A&E Factory Service which basically allows Sears to service 3rd party merchandise.They can do service for companies like Lowes and Home Depot.
This is a move from around 2003 I think.This idea supposedly came from Sears Roebuck execs.I don't know wether they did this to try and corner the service market or greed.But it makes selling appliances for the competition easier since they now have a servicer. Selling the Sears Brands in a third party store would also make selling tools for them easier cannabilizing Sears sales but putting money in SHLD's/ESL's hands. |
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Joined: 28 Apr 2005
Posts: 1634
| Posted: Thu Aug 14, 2008 4:13 pm Post subject: Re: kenmore, craftsman, diehard - intellectual property | |||
It's a way of making it appear the brands have independent value outside the context of Sears, since Sears is now making a payment for the right to use the brands. Later on they can sell the brands, using the money flows as a basis for valuation. It's a smoke and mirrors financial game to prop up the value of sagging names. |
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Joined: 29 Mar 2006
Posts: 1205
Location: Ontario, Canada
| Posted: Fri Aug 15, 2008 5:14 pm Post subject: | |
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"goodwill" is an accounting term that often relates to this sort of intangible asset. How can you really put a price on a product name? Well, Eddie found a way to put a concrete price on a name, not on individual assets or products.
In essence, Eddie has created an asset worth billions that he can now use to milk more money from the corporation, can possibly use as collateral for more borrowing, can use to prop up the financial statements with more worthless worth. It is almost the same as the over inflated real estate values. The reality is, we don't even make any of these products that use the brand names. They are all made by third party manufacturers for us. Each of those manufacturers can tweak the product (change the panel on a Kenmore appliance) and put any brand name they want on it. So, what is the real value of the name? It used to be the reputation that Sears had for quality, both in product and the after sales service. Does any of that still exist?? |
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Joined: 28 Apr 2005
Posts: 1634
| Posted: Fri Aug 15, 2008 5:57 pm Post subject: | |||
Well said 
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Joined: 06 Jul 2003
Posts: 6727
Location: Central CA
| Posted: Fri Aug 15, 2008 8:22 pm Post subject: | |||||
Ditto! |
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Joined: 08 Jul 2003
Posts: 4780
| Posted: Sat Aug 16, 2008 1:56 pm Post subject: What's in a name | |
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You got it SC-the name changes but it's all the same
It used to be everyone knew that Whirlpool made Sears Kenmore Appliances so you either associate Whirlpool or Kenmore with Sears appliances now it's just another face in the crowd. I hope that 1.8 Billion dollar number isn't the average yearly sales for Kenmore and Craftsman.You would think it would be higher if based on yearly sales-That's about a 1/10 of the sales at Sears anyway. For more on the intellectual property deal see http://www.retail-worker.com/forum/about7273.html |
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