'Gonna wash those brands right out of my hair': a niche firm making waves for the big boys' rejects

"Let Dynasty Not Become Dallas". As family mottos go, it's up there with the best of them. It belongs to the Jatanias, the Uganda-born, London-based owners of Lornamead, which last week snapped up Finesse and Aqua Net from the Anglo-Dutch consumer goods giant Unilever.

The two US haircare brands, as one analyst notes, are by Unilever's standards so small "you wouldn't know they had them in the first place". But since the late 1990s, Lornamead has carved a niche for itself in orphan brands - the non-core, under-utilised or just unloved products that no longer fit the portfolios of multinationals.

The business was set up in the 1970s by the four Jatania brothers - Mike, George, Vin and Danny - as a trading firm. By the 1980s it had started to diversify, launching and developing new brands in wines and spirits, food and personal healthcare.

But it was not until Mike Jatania, the youngest brother, took over as chief executive in 1999 that its current guise came to the fore. "Brands take time to build," he says. "Organic growth is tough and starting from zero is an incredibly long-term strategy." So he began pursuing acquisitions but with a focus on the sort of non-core brands that Unilever had started selling off under its Path to Growth portfolio shakeup. Lornamead has picked up Harmony and Lypsyl, among others, from Unilever, and Vosene and Yardley from Procter & Gamble.

Other people's castoffs may not, at first glance, be an attractive proposition. But there is brass in that muck, to borrow a phrase. "Unilever's focus is on the number one and two market positions, so tail brands don't have much relevance for a business with a global cost structure," says David Lang, consumer goods analyst at Investec. "But if you have a local cost structure and local markets then you can make some sense out of them."

Lornamead's most high-profile acquisition so far is Yardley, the soap and perfumes business that dates back to 1770 and boasts three royal warrants. It has been going through turbulent times. After several owners, the business collapsed following a failed attempt to remarket itself to a younger audience in a campaign featuring Helena Bonham Carter, who admitted she never used the stuff. Wella bought it but the German haircare group was then acquired by P&G, which decided Yardley did not fit its stable of brands and sold it to Lornamead.

Stuart Whitwell, joint managing director at brand consultancy Intangible Business, believes it could be successful once again if managed correctly. "They will have to focus on the market they already have - 45-plus women. I don't think Yardley has more legs than that. But the target market is growing; we're all getting older. They will probably put out new products. If you have a really strong brand, you just give people more opportunities to use it more frequently."

History proves brands can be reinvigorated. Take Plymouth Gin. Several changes of ownership had left the 200-year-old distillery, which once supplied 1,000 barrels a year to the Royal Navy, in the doldrums. But a group of private investors bought it, upped the gin's strength, repackaged and remarketed it. From then on, sales soared.

The likes of Lornamead are also in illustrious company in spotting the potential of under-utilised brands. The five founding partners of the advertising agency M&C Saatchi, including brothers Maurice and Charles, set up Saatchinvest to do just that. The venture snapped up food supplement Complan and, along with other investors, Hunter Rubber (although the Wellington boot firm has since gone into administration, proving there are no guarantees when it comes to managing brands).

Premier Foods, the owner of Branston Pickle, has also built up a reputation for reinventing tired products.

The Jatanias' latest focus, meanwhile, is the US - a market that has scarred bigger and arguably better businesses than Lornamead. But as a small company with a slim portfolio, it can lavish time and attention on its new acquisitions.

Mike Jatania, for example, spent most of last week in the US at a retail trade show; it is unlikely that Unilever's boss Patrick Cescau would find quite so much time in his schedule.

"It's a very tough market indeed," he says. "We made our first acquisition in 2002 and that was my caution saying 'let's dip a toe in' and understand how the market is doing, rather than make assumptions from across the pond. You need to find out about the returns policy, how retailers work, which channels are important."

Caution is certainly paying off. Although Mike Jatania is the only family executive (his brothers have become non-executive directors), the clan has done well out of Lornamead. Worth around £850m, they live in apartments in the same luxury block in Marble Arch. Last month, Mike Jatania was named Britain's top Asian businessman. But he dislikes the tag "family business" and says that while he plans to buy more "heritage brands", he also has an eye on an exit.

"In the next three to five years, we want to have strategic options which could include a sale, recapitalisation or float. I'm not ruling out any of these things."

The family motto, he adds, was a quote taken out of context, but he concedes it has stuck: "We have all seen value destroyed in family businesses. We started off as a family business but now we're a business family." And it is the orphans that are bringing home the bacon.