"Is your textile brand worth billions?" asks Naseem Javed

17 Jun '05

5 min read

Is your brand valuation worth a billion dollars today? Maybe yes or maybe no, but it surely is worth something pretty big. At the end of the day, all the work you have put in pushing your name identity and your range of products and services in your marketplace adds up in an abstract space of the consumer's mind, where it acquires some great value.

This equity can be measured as a real, soft asset. It can have a monetary value like that of a certain type of goodwill or particular reputation. Brand identity is something you might not use to pay the bills but can surely use to negotiate a better price in an M&A or sale of the company.

To measure the value, there are many rules, mostly according to the sales volume and how it has increased over the years, monies spent in promotion and advertising, and how the brand has climbed and at what rate. There also are many other factors, like financial performance, customer perceptions and actual market share.

Published Figures
Most valuations are in billions of dollars; otherwise they don't get media attention. Most top brands of any country are often valued in tens of billions of dollars, and unless you gather a team of forensic accountants, there is no way to prove it wrong or to challenge how a US$50 billion brand value slipped to $25 billion and vice versa.

Most high-profile valuations are done without any input from the management and the owners of the brands, as it is done from published figures. Sometimes brand owners get pretty upset as they are moved seemingly arbitrarily up and down the scale against their competitors.

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