Details

Case

Educator Copy

Fashions and Fads: A Tragic Irony

Wasif M Khan


INDUSTRY : Garments

AREA : Marketing

ORGANIZATION : N/A

LENGTH : 13

LUMS No : 04-2320-2002-1

PUBLICATION YEAR : 2002

DESCRIPTION

KEYWORDS:

Fashion,Fads,Tragic Irony,Marketing,Garments,Crisis,Partners,Entrepreneurs,Value,Profitable,Managing,Operating


DESCRIPTION:

The death of the inspirational leader and one of the founding entrepreneurs has created an ownership and management control crisis at Fashions and Fads, which has been run essentially on the basis of trust between the partners. As the family and partners grieve, it is proposed to separate a low capital intensive, profitable part of the operation since the overall entity faces severe liabilities. The conditions imposed by the partner managing that operation make it imperative that one of the two remaining partners buy-out the other. Valuing the operation under limited observability and asymmetric information poses a challenge to both partners. Students must grapple with objective and subjective factors underlying valuation of closely held firms, as well as gaming issues in determining a value for the firm.


LEARNING OBJECTIVES:

N/A


SUBJECTS COVERED:

Marketing