GC roundtable

• To be successful in representing a luxury brand, an in-house lawyer needs to have an international approach, an ability to pivot and react to unexpected issues and an understanding of quantitative data.

• To be successful in representing luxury brands, outside counsel should

  • Understand the client’s business

  • Keep abreast of industry literature;

  • Lessen the load on their in-house clients/think about what would make in-house counsel’s life easier;

  • Prepare management-friendly, digestible advice;

  • Tailor advice.

Luxury M&A update

Kelly Tubman Hardy hosted a fascinating discussion with Cara Dwyer (Senior Director-Legal at Seddiqi Holding) and Anthony Doolittle on trends in the luxury M&A market.

• We can expect continued consolidation in the luxury market, as persistent inflation, struggling economies and geopolitical uncertainty cause smaller players to be absorbed.

• The Middle East, especially in Dubai and Saudi Arabia, represent key growth markets for luxury retailers. Their luxury-focused consumers present ready-made markets for international brands, and luxury brands have significantly increased their presence, particularly in Riyadh, both through local retailers and by establishing local subsidiaries for DTC retail channels.

• This mega-election year could impact the M&A market, both because of the uncertainty it will cause and because of how it could affect merger control in the US.

• Assessment of reputational risks is central to any luxury M&A transaction, and includes a thorough assessment of risks related to the involvement (and eventual exit) of any founder of eponymous brands, ESG and other advertising claims, IP ownership and counterfeiting risk, brand identity, and relationships with suppliers and distributors. 

Digital assets and luxury brands

• Digital assets are being utilized throughout the luxury market, including in the authentication of physical products, recordation of ownership and conservation of heritage pieces, and driving consumer engagement with brands.

• Difficulties associated with digital assets include the conflict between the immutable nature of a blockchain and privacy rights and the risk that NFTs will be deemed securities (and the regulatory complexities associated with that).

Catwalk to tunnel walk – when sports and luxury meet

• The differing motivations behind partnerships between luxury brands and athletes created challenges.

• Flash points in negotiations include disputes about the scope of exclusivity and a brand’s ability to terminate/pause the partnership if an athlete acts out of line with the brand’s image/values.

• Brands sometimes fail to understand the practical realities of an athlete’s existence, including training requirements and lack of control over team uniforms, which might include competitors’ marks.

In-house legal teams – joining a business and building resilience

• A GC’s external network can be key in navigating a new role.

• It is important to develop a legal risk register from which to build a legal action plan and to accept the inability to “fix” everything straight away.

• Managing stakeholders who might not have worked with an in-house counsel before can present a particular challenge.

Authored by Kelly Tubman Hardy and Emily Sharkey.