Catalog owners tend to assess their year-earlier performance while on a short break after the holiday sales period, and often come back to the office ready to change or improve their positions. Simply, they ask themselves if last year was enough; now can I/should I sell out? And if so, what the devil are the next steps?
The proper answer requires you to ask yourself a number of questions:
1. Why are you selling?
2. What growth “storyline” have you accumulated (for a good valuation)?
3. If this is, indeed, the right time to exit, should it be all-at-once, or via a phased-out program for you and your
At the annual DMA Catalog Council holiday reception held in New York on Dec. 5, two different catalogers asked a similar series of questions.
*Is catalog dealmaking winding down, or is a lot still going on?
*Are the two key buyers driving the market still equity houses and retailers?
*Will there be a lot of deal announcements in January?
They began their questioning by noting that it’s nearly mid-December and while general 2006 M&A activity reported in the national press is at an all-time high, cataloging deals seem relatively minimal.
My answers are fairly similar to this time last year, and they’re somewhat intertwined. Yes, a
A reader of the most recent M&A:Q&A asks: “How long is the typical term of the licensing agreement in these deals? Do they go on forever, as long as either party does not breach? What’s the risk to Blue Sky of investing in these deals and then losing the license in five to seven years?” (Click here for original column)
Larry West responds:
License agreements are typically for an initial term of three to five years, with co-renewal rights. Some can be as long as 10 years. Others, similar to these, can be renewed in perpetuity.
Having said that, you’re right, the ultimate term depends on
These are complex deals and for the launch of my new section on CatalogSuccess.com, I will explain some of the metrics and reasons for this unique transaction structure.
First, however, here’s the deal: BlueSky Brands, which owns the for-profit Paragon and Bits and Pieces catalogs, signed exclusive licensing agreements to manage and operate the direct-to-consumer catalog and Internet merchandising businesses of Winterthur Museum & Country Estate and the National Wildlife Federation (NWF), both of which are nonprofit organizations.
Winterthur and NWF have operated successful direct response merchandising business for years. In this deal, BlueSky formed two operating brands: Winterthur Direct (WD) and National Wildlife
Really… I mean it!
If you’re not already in the catalog business, don’t start one. In fact, you can stop reading here.
Don’t even waste your time…
O.K., you got me. I’m being ironic.
In fact, a few paragraphs down, I’ll tell you why now is the best time to start a catalog business. But, only as long as you’re willing to follow the few simple rules of the catalog business. Rules that run counterintuitive to your current business model.
To me, this is a fitting way to start my first weekly blog (silly word blog, but less silly than saying the word “spam”
