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Fashion Designer Uses Brand as Collateral for $53 Million Loan.

LOS ANGELES, May 2007 -- Fashion Mogul BCBG Max Azria Group secured a loan for $53 million with a favorable interest by pledging its brand as collateral.

In an effort to expand its wholesale and retail presence, particularly its BCBG Max Azria stores, the BCBG Max Aria Group pursued using its trademarks as collateral to secure financing for the expansion, which is considered unusual in the fashion and entertainment industries. Like many designers, BCBG MaxAzria licenses its trademark to other companies to used on products with the owner receiving a percentage of the sale price.

To enable to sale, BCBG Max Azria created a subsidiary specifically to own the trademarks and licensing income. The subsidiary, rich with assets and holding a high credit rating, then obtained the loan.

Max Azria, the sole owner of the business estimated to be worth nearly $1 billion, said, "We found the idea interest as a possible way to raise inexpensive, long-term capital." He added, "We were able to secure reasonably priced long-term capital from a major institutional investor – a major insurance company. Associating ourselves with such a high-quality lender helped us in future financing."