Brentwood Associates Acquires Majority Stake in Soft Surroundings

Aug 14, 2012 1:36 AM  By

Private equity firm Brentwood Associates has acquired a majority stake in apparel merchant Soft Surroundings, which will continue to be managed by CEO Tom Wilcher and company president Robin Sheldon. According to a press release, the new partnership of Brentwood Associates and Soft Surroundings plans to expand the brand’s direct (catalog and ecommerce) and retail channels.

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Terms of the deal announced Aug. 6 were not disclosed. Just last month Brentwood Associates acquired the Sundance catalog. Soft Surroundings, ranked 10th among apparel merchants in last year’s MCM 100 list, has seen 15%-20% growth in each of the past two years.

Founded in 1999 by the current executive team of Sheldon, Wilcher, and Grant Williams, St. Louis-based Soft Surroundings is a multichannel lifestyle brand, offering proprietary apparel, beauty and home solutions.

Eric Reiter, partner with Brentwood Associates, said in the release that Soft Surroundings has “carved out a unique niche within the women’s apparel market, targeting an underserved consumer and bringing her special products and a unique customer experience.”

What’s more, Soft Surroundings is expanding its retail store network, with recent store openings in Kansas City, MO and Denver, CO. The company is also planning new store openings in malls and lifestyle centers in Boston, MA, San Antonio, TX and Houston, TX by the end of 2012.

Soft Surroundings is the 10th acquisition by Brentwood Associates’ latest fund, Brentwood Associates Private Equity IV, L.P. The acquisition is being partially funded through senior debt. OneWest Bank, FSB is acting as administrative agent for the senior credit facility. Brentwood was represented by Greenberg Traurig LLP in conjunction with the transaction. Soft Surroundings was advised by Financo while AEGIS Professional Services acted as legal counsel to Soft Surroundings.

Lee Helman, managing director with investment firm Financo, said in an email that Brentwood Associates will provide expertise, experience and its network to help guide Soft Surroundings’ growth in the future.

“Management and Brentwood are completely aligned on the strategic direction and will look to accelerate the already strong growth that Soft Surroundings has experienced to date,” Helman said.

Helman said that Soft Surroundings management believes that the best days for the company lie ahead.

“The team sees a tremendous opportunity to leverage the investments that they have made to date in the company by bringing in a value-added partner in Brentwood Associates that not only is an expert in the catalog and ecommerce arenas and embraces those channels of distribution, but is also an investor/partner that has deep experience in helping portfolio companies expand their retail concepts with great success,” Helman said.

Chris Kampe, managing director at investment firm Tully & Holland, said in an email that Brentwood Associates has been aggressively seeking to acquire branded multichannel businesses this year.

Brentwood Associates seeks companies with branded catalog and internet retail businesses with sales of $50 million to $500 million and EBITDA of $5 million to $50 million, Kampe said. Other characteristics sought are positive trends, defensible niches, sizable databases, well-known brands, and an ability to scale the business.

Jim Tierney (jim.tierney@penton.com) is a senior writer for Multichannel Merchant. You can connect with him on Twitter (TierneyMCM) and LinkedIn, or call him at 203-358-4265.