Nipper the Dog Trademark Seen as Most Valuable HMV Asset

Photographer: Matthew Lloyd/Bloomberg

The century-old image of cock-eared Nipper listening to a gramophone, dubbed “His Master’s Voice” and the source of HMV’s name, could be sold along with other trademarks to investment companies. Close

The century-old image of cock-eared Nipper listening to a gramophone, dubbed “His... Read More

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Photographer: Matthew Lloyd/Bloomberg

The century-old image of cock-eared Nipper listening to a gramophone, dubbed “His Master’s Voice” and the source of HMV’s name, could be sold along with other trademarks to investment companies.

The collapse of HMV Group Plc (HMV) might shutter 230 CD shops and eliminate thousands of jobs. What’s overlooked in the tumult is that the demise of Britain’s biggest seller of music and movies will leave Nipper the dog, its U.K. trademark, as its most valuable asset.

The century-old image of cock-eared Nipper listening to a gramophone, dubbed “His Master’s Voice” and the source of HMV’s name, could be sold along with other trademarks to an investment company such as Endless LLP, Gordon Brothers Group LLC, or Hilco Trading Co.

Their interest illustrates the thriving trade in downtrodden brands like Woolworths and Polaroid. Sales of such assets are growing as more retailers and consumer-goods companies go bust, according to U.K. law firm Shoosmiths.

Liquidation specialists are attracted by the value of a brand and related trademarks. They can breathe new life into so- called “phoenix” brands by repositioning a brick- and-mortar retailer as an online merchant, say, or licensing the name to others for new products, said Gary Assim, an intellectual property lawyer at Shoosmiths.

“Roughly speaking, 70 percent of the value of a company is goodwill, or the value in the brand -- it has nothing to do with its physical assets,” Assim said. “A business with a high goodwill value, like HMV, is more likely to be a phoenix brand.”

Get Closer

HMV has 53 trademarks registered with Britain’s Intellectual Property Office, according to the office’s website. These include “His Master’s Voice,” “HMV Headphone Hut” and “HMV Get Closer,” a short-lived social networking site that the company shuttered in 2009. HMV has registered Nipper’s image as a trademark for businesses ranging from clothing to toys to coffee shops.

The company also owns trademarks in the U.S. and across Europe, according to Maninder Gill, head of the intellectual property and retail groups at London law firm Simons Muirhead & Burton.

“Any brand with substantial brand recognition will survive in one form or another,” Gill said. “HMV, with its heritage across generations, has some value. But the question is how much?”

In 2011, HMV estimated the value of its “intangible assets,” including Nipper and the company name, at 48.7 million pounds ($78 million at today’s exchange rate). It’s far from certain, though, that the company could get that much if the name and logo were auctioned, Gill cautions. The brand, trademarks, and e-commerce business of U.S. electronics chain Circuit City sold for $14 million in 2009.

Fox Terrier

Complicating matters, ownership of the trademark for His Master’s Voice has been divided around the world, potentially reducing its value. The name was coined back in 1899 for a painting by English artist Francis Barraud of his brother’s fox terrier Nipper.

The Gramophone Co. of Britain purchased the image for 100 pounds and used it as a banner for its stores, eventually shortening the name to HMV. Gramophone Co. ultimately became part of record label EMI Group Ltd., which spun off the HMV shops in 1998.

In the U.S., phonograph maker Victor also used Nipper as a trademark. It then passed to Radio Corp. of America, which bought Victor in 1929. Today, the Nipper image for use on radios sits inside RCA Trademark Management, part of French entertainment company Technicolor SA. (TCH)

Phonograph Needles

Another five U.S. applications of the trademark, including one for record-player needles, have expired, so Nipper would be available to companies wanting to use the image for any business other than radios. In Japan, JVC Kenwood Corp. (6632), a former subsidiary of RCA Victor, owns Nipper.

New York consultancy Interbrand has created tools to measure the value of brands. Interbrand’s methodology includes financial results, the sway a brand holds over consumers when they make buying decisions, and its ability to generate demand in the future, according to Graham Hales, chief executive officer of Interbrand’s London office.

HMV and similarly troubled companies “are still great brands -- they just lost their relevance,” Hales said. He declined to estimate a value for Nipper.

Nipper Bedsheets

One way to regain relevance is to move online. U.S. home goods retailer Linens ’n Things, which once operated 571 stores, sells its wares at lnt.com after emerging from bankruptcy in 2009. Woolworths Group Plc, the British discounter that entered administration in 2009, closed its 815 stores. Shop Direct Group Ltd. resurrected the brand as an online merchant, 100 years after New York-based Woolworths opened its first British store in Liverpool.

Other brands live on by licensing their name to sell items related to their core product. Polaroid, which gained a mass following in the 1970s with cameras that printed photos instantly, emerged from bankruptcy in 2009 as a marketing and intellectual-property holding company. PLR IP Holdings LLC bought Polaroid’s assets and now offers the name to makers of cameras, digital frames and accessories.

HMV could thrive in its next incarnation if its new owner were to focus on a niche activity where it has credibility and could attract consumers, like music festivals or concert halls, according to Ben Voyer, a marketing professor at ESCP Europe Business School.

“Consumers would be happy to see the brand saved and survive, in one form or another,” Voyer said.

Extending the brand too far from its origins carries risks, though, according to branding experts. An HMV online music and memorabilia store could work. Nipper bedsheets? That dog, as they say, probably won’t hunt.

To contact the reporter on this story: Matthew Boyle in London at mboyle20@bloomberg.net

To contact the editor responsible for this story: Celeste Perri at cperri@bloomberg.net

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