Shouldn’t some brands just die?
People get attached to brands, don’t they? Customers have their favourites. But company’s also have emotional involvement with them, and invest money, time and effort in growing them. Indeed, the whole brand management system is designed to have people campaigning and fighting for their own brand inside the company.
But shouldn’t some brands just be left to die? Aren’t there cases where despite all your best efforts, you’re better off just throwing in the towell?
Here’s an example that I think falls into that category. Little Chef. Now, for non-UK people, this is a beacon brand that helped put the great in Great British food. Sorry, that was British humour. It is known for its greasy, medicore quality big English fried breakfasts, in cheap plastic surroundings, by the side of the motorway. You could not get more off trend if you tried.
It started in 1958, and grew strongly up until the 1990’s, when people became more demanding in terms of quality and healthiness. It was sold by Granada to private equity group Permira in 2002 for £712m. An attempt was made to modernise the brand by slimming down the Fat Charlie bloke in the logo. But after 15 000 people protested (some people really have too much time on their hands) the change was dropped.
Well, Little Chef wasn’t one of Permira’s best deals, as it was sold again in 2005 for £52m. Then earlier this year it went bust, and was bought for £10m by tunraround specialists RCapital. See a trend there at all. A few months later, and the chain is up for sale again, and here comes the bit about how hard it is to kill a brand….
… RCapital are insisting that any new owner keep the brand name and the "Fat Charlie" logo. Wierd huh? What do they care if they get their cash; why put off potential buyers? For example, Italian motorway restaurant chain Autogrill is interested in the business, which does after all serve an amazing 20 million customers a year. But they would understandably want to re-launch it as Autogrill. It would take more than a new "image wrapper", they’d need to
upgrade the menu and restaurants. But wouldn’t the business have more of a chance as Autogrill than Little Chef?
At the end of the day it come down to weighing up 2 things. On one side is true equity, stuff that helps you sell stuff. On the other side is "baggage" that just drags you down. And if the brand has more baggage than equity, it may be time to get the shotgun out and put it out of its misery.