At Deadline

Mar 01, 1999 10:30 PM  By

GENESIS DIRECT DOWNSIZES After building a stable of more than 30 catalogs over three years, Genesis Direct announced on Feb. 3 that it would sell all its non-sports-related titles and lay off 150 salaried positions-about 30% of its work force. Genesis announced that same day that it had sold its $32.6 million Sporttime division, which consists of four catalogs selling recreational products to schools and other institutions, to b-to-b educational supplies cataloger School Specialty for $23 million. Genesis expects to raise another $60 million from the sale of its nonsports consumer catalogs and use the proceeds to expand the Web presence of its nine sports titles, which include Manny’s Baseball Land, Hot Off the Ice, and 1-800 Pro-Team. To reflect its new emphasis on selling licensed sports merchandise, Genesis planned to change its name to Genesis’s decision came on the heels of a third-quarter loss of $18.9 million (significantly less than the previous year’s third-quarter loss of $32.2 million). “Because of the stock market crash over the summer, their stock price got below the point where it wasn’t easy for them to make acquisitions and their losses continued,” says Kevin Silverman, managing director of Chicago-based investment bank ABN Amro.

TRANSMATION TO BUY METERMASTER Transmation, which sells and services test, measurement, and calibration equipment through its Transcat catalog, has agreed to buy Marietta, GA-based Metermaster, the largest distributor in the world of standard and customized panel instruments. In addition to selling its products through local distribution offices, the $21 million Metermaster was to mail its first full-line catalog by early March. The $100 million-plus Transmation will pay $1.8 million to buy all the Metermaster stock, long-term employment contracts and settle other liabilities. The acquisition, which at press time was supposed to be completed by the end of February, is exactly the business in which Transcat is engaged, said Transmation chairman Robert Klimasewksi in a statement. Metermaster’s operations include a value-added meter modification business, a test and measurement distribution business, and a service division.

SPORTS SUPPLY GROUP BUYS ONE, LAUNCHES ONE Seeking to become the one-stop source for schools’, daycare centers’, parks’ and other institutions’ sporting goods, playground and remodeling needs, in January, Sport Supply Group, a $100 million b-to-b cataloger, bought Conlin Bros. Sporting Goods shortly after launching its own Junglebug Play.Works product line. Conlin Bros., which mails a catalog to, and circulates field salespeople throughout, California, represents the first of many other acquisitions of similar regional b-to-b direct sellers of institutional sporting goods. It’s a significant first step, says Sports Supply vice president of sales and marketing Adam Blumenfeld. There are other large team dealers/catalogers with proprietary brands like Colin. So if we combine them with our product line, we can make them all more profitable. As for Junglebug Play.Works, Sports Supply dropped 125,000 JungleBug catalogs in early January to schools, park systems and daycare facilities nationwide. Blumenfeld says the catalog’s prices range from $5,000 to $250,000 centswith the largest orders including complete interior and exterior overhauls of daycare centers.

GARDEN BOTANIKA BOOTED OFF NASDAQ On Feb. 1, cosmetics cataloger/retailer Garden Botanika was removed from the Nasdaq National Stock Market exchange and that its securities would cease trading. Nasdaq said that Garden Botanika doesn’t meet the requirements for continued listing on account of its market capitalization and continuing bid price deficiencies. The Company’s securities, however, are eligible to trade on the Over The Counter Bulletin Board.

FINGERHUT BUYS 19.9% OF ROXY SYSTEMS In its sixth major deal in as many months, Fingerhut Co. acquired a 19.9% equity interest in Roxy Systems, which sells digital communications and entertainment services such as home satellite TV, digital wireless phones, and dial-up Internet services online. Fingerhut will provide back-end services including order processing, fulfillment, merchandise integration, and database management, as well as assist in promotional advertising and marketing support. The acquisition continues Fingerhut’s surge into e-commerce and build-up of assorted direct marketers. In July 1998, Fingerhut acquired an equity interest in PC Flowers and Gifts, an online cataloger of flowers and gourmet food; in August, November, and December, the company had bought catalogers Arizona Mail Order, Popular Club Club, and Bedford Fair, respectively. Also in December, the company purchased equity interests in Internet-based companies and The Zone Network.

J. PETERMAN SCRAMBLES TO SURVIVE On Jan. 27, two days after J. Peterman filed for Chapter 11 bankruptcy protection in the Eastern Kentucky District Bankruptcy court, the apparel cataloger/retailer was granted a $1.96 million bridge loan from an unnamed primary creditor, allowing operations to continue at least through Feb. 12. Sources say founder John Peterman was hoping to find a buyer by that time. At press time, a court hearing was scheduled for Feb. 8 and the company was continuing to operate its mail order division and 13 retail stores. Despite a 17% sales increase, to $74 million in 1998, poor holiday sales, which created excess inventory problems, and an aggressive retail expansion strategy that included 70 new stores found Peterman in debt. By December, the company was unable to obtain additional financing from lenders or partners. The company, which listed $40 million in liabilities and $35 million in assets, seems it just got caught in the crossfire of a tough fall and holiday selling season,” observes Bill Nicolai, senior vp of marketing for The Good Catalog Co. and a former consultant to Peterman.