This famous perfume entrepreneur’s only regret is selling her name
Ms Jo Malone CBE is a British perfumer and founder of the Jo Malone London and Jo Loves perfume brands.
Mike Green, CNBC
Miss Jo Malone CBE became a millionaire after selling her eponymous perfume brand in 1999, and decades later she has only one regret: never being able to use her name again.
Malone founded the Jo Malone London perfume brand in 1990 and nine years later sold it to Estée Lauder Companies, along with the rights to use her name in any business.
“I look back and think to myself: ‘If I had waited another five years, I could have doubled that amount,’” the 62-year-old British entrepreneur said during an episode of CNBC’s “Executive Decisions” podcast with Steve Sedgwick.
But he added: “I think the only thing I regret is – and they [Estée Lauder] may not have purchased the company [without it] – is the use of my name. “It’s a struggle even today.”
‘Actually, I think the law should be changed’
Under British law, when you sell a business based on your name, you’re typically selling goodwill and the right to use that name, Simon Barker, partner and head of intellectual property at law firm Freeths, told CNBC Make It.
Using your name for a similar business after you sell the business may cause consumer confusion and may violate your contract or infringe on trademarks the buyer currently owns.
This can also mean “passing”, a British legal concept that prevents someone from misleading the public into thinking their goods or services are affiliated with another business.
Malone’s subsequent businesses use only her name to ensure they do not violate her agreement with Estée Lauder. These include luxury perfume brand Jo Loves and, more recently, alcohol brand Jo Vodka.
While the sale of his first brand made him rich, Malone said sacrificing his name was “the hardest thing.”
“I don’t want to cause any problems, but I actually think the law needs to change on this issue, because people are selling their businesses under their own names, and if you say you can’t use your name for the rest of your life, that’s a lifetime non-compete,” he said.
“I think the law will have to look at how businesses are sold and how non-competes come into play,” he added.
‘Contract restrictions overshadow everything’
Malone is one of several British entrepreneurs who sold a brand bearing his name and later regretted it.
fashion designer Karen Milen He sold his business in 2004 and agreed not to use his name in a competing business worldwide. He later challenged the restrictions, but the court ruled that using his name would cause consumer confusion.
Meanwhile, Elizabeth Emanuel, the designer of Princess Diana’s wedding dress, sold her business, including the rights to use her name, to a company that later transferred those rights to new owners. When he tried to stop them from using “Elizabeth Emanuel,” the courts ruled that the sale meant the new owners legally controlled the name and trademark.
“Contractual restrictions trump everything,” said Barker, the attorney. “They go above and beyond. So if you say: I won’t use my name for a competing business, then the new buyer can enforce that agreement against you.”
It’s a similar story across the Atlantic. American makeup artist and entrepreneur Bobbi Brown sold her eponymous cosmetics company to Estée Lauder in 1995 and was contractually obliged not to use her name commercially in competition with the brand.
While the US has similar laws preventing entrepreneurs from breaching contractual obligations, it also has a “right of publicity” law that does not exist in the UK.
Barker explained that this “protects against unauthorized commercial use of someone’s name, image or likeness.” “The twist is that you will almost certainly lose the right to use your name for similar products or services due to contractual restrictions, but the right of publicity may still allow you to control other uses of your name, advertising or endorsements.”
Negotiate your contract
Malone advised young entrepreneurs and first-time founders to think twice before selling the rights to their own name.
“I would tell people, and anyone who is considering a purchase, to think about all the ramifications first, especially if your name is associated with your business,” Malone said. he said. “Think about these things, because you will sacrifice some things, you will have to give and surrender and gain something else, but never do it just for the money.”
Barker adds that you can negotiate what’s included in the contract before selling the business, perhaps including changing the name. However, there are some caveats; As is often the case, without the original name the brand cannot retain as much value in purchases.
He said founders should consult with advisors and potentially seek “watered-down restrictions.”
“But of course it’s not always that simple, because someone will wave millions of pounds at you,” he added. “And if you say, ‘I want all of that,’ they’ll probably turn around and say, ‘Then we’re not going to give you that much.'”
