Shortly after cataloger/retailer Petals filed for Chapter 7 liquidation in November, its name and assets were acquired by Ridgefield, CT-based private equity firm Southridge Capital Management through its subsidiary holding company, Petals Decorative Accents Corp.
Six months before filing for Chapter 7, the marketer of artificial flowers and other home accessories had filed for Chapter 11 bankruptcy protection. At that time, Petals listed $32 million in assets and $40 million in debt.
Phil Schiavoni was named Petals CEO. He replaces former president/CEO Richard Belenski. Petals Decorative Accents Corp. plans to relaunch the brand in January with a catalog mailing to customers. The company also plans “to expand Petals’ product offering and increase sales by developing a creative marketing approach that emphasizes lifestyle enhancement and outstanding design,” according to a release. And it intends to grow Petals’ channels of distribution beyond catalogs and stores to include wholesale, corporate sales, and affiliate programs with other retailers.
Prior to December 2001, the assets and stock of Petals had been pledged as collateral for debt financing by its then-parent company, Interiors. When the now-defunct Interiors could not liquidate its debt, its creditors foreclosed on their collateral, and Petals became a freestanding company. Petals retained significant liabilities — primarily Interiors’ $26 million worth of debt. To avoid being evicted from its Suffolk, VA, warehouse, which held a substantial part of its inventory, Petals had to file for bankruptcy protection.
Southridge Capital was founded in 1996 and has $1 billion in growth capital under management.