Rummaging Through the Brand Bone Yard
During the recent retail bankruptcies, merchandise (and even the shelving, counters, and cash registers) was sold at huge discounts because "Everything Must Go!" However, one thing that couldn't be put on clearance under a bright yellow sign is the years of brand equity these stores had built. Even though the brand names weren't on sale, they transferred to the liquidation companies along with whatever knickknacks and display models couldn't be unloaded. So what's happening to the names Linens 'n Things, Circuit City, and the rest?
Many of them are enjoying new life thanks to their owners' bankruptcy holding companies. Some will re-emerge as brand names in other department stores, others will live exclusively online, and some will offer even more products than before bankruptcy.
What I'd like to know is how much does going out of business hurt a brand's image? Are these names as valuable now as they were a year or two ago, and do consumers still place the same trust in them? Would you stay loyal to a Sharper Image or Circuit City following a going-out-of-business sale?
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I saw the story the other day about the Circuit City brand named being auctioned off (I believe for $6 million?) Granted, it's a well-recognized name, but you have to wonder if it carries any value. Everyone knows the troubles the company went through that led them to close. You have to wonder if there's any goodwill left there with the consumers.