Capital Markets

Bee the Brand

Creating a brand is just another financial tool in the capital-raising box.
Joseph McCaffertyJanuary 1, 2006

In November, Strategic Hotels & Resorts unveiled a slick new corporate image, including a bumblebee logo. The new brand isn’t designed for customers; it’s intended to help the firm market itself to Wall Street.

The branding exercise, completed at the insistence of James Mead, CFO of the Chicago-based real estate investment trust, which owns and manages high-end hotels and resorts, is just part of an effort to unify the firm’s message to investors. The gold bee logo, with the word “strategic” beneath, appears on all investment materials. It symbolizes the characteristics of community, hard work, and elegance that Mead sees as the components of the corporate vision. Meanwhile, Strategic Hotels, which conducted an initial public offering in June 2004, relies on the well-established brands of the hotels it owns, including a few Four Seasons and Fairmont properties, to work their magic on consumers. (While Strategic Hotels owns properties under those names, it doesn’t own the brands.)

The CFO says creating a brand is just another financial tool in the capital-raising box. “When you don’t have a long track record to hang your hat on, how you perceive yourself is very important,” says Mead. “The brand helps us understand that, and project it to potential shareholders.” Mead hired an outside advertising agency to develop the brand, which cost $100,000 in total.

Investor-relations experts agree that branding is an important part of appealing to investors. “Companies are more and more aware that image is a key factor in attracting investments from Wall Street,” says Lou Thompson, president of the National Investor Relations Institute, in Vienna, Va. Branding is about more than just a logo: it’s about the reputation that a company builds on the Street, he says. Thompson contends that finance executives sometimes struggle with the idea of branding. “A lot of people on the finance side aren’t comfortable with things that are hard to quantify,” he says. Yet, strategic CFOs are getting more involved with how the corporate brand is portrayed to investors, he adds.

But branding can backfire if the message doesn’t match reality. “There is nothing wrong with using some sizzle to facilitate attraction,” says Bob Leahy, general manager of the eastern region of the Financial Relations Board, an investor-relations firm. “But at the end of the day, the numbers speak.”