Concepts Direct is officially on the selling block. On Dec. 23, the Longmont, CO-based multititle cataloger announced that it would begin soliciting buyers. New York-based investment bank Gruppo, Levey & Co. is advising Concepts Direct.
The decision to sell came four days after chairman/president/CEO Philip Wiland and his wife submitted an offer to the board of directors to buy Concepts Direct for $0.68 per share. In their letter of intent, the Wilands indicated that they or their affiliates would pay approximately $2.1 million in cash for the roughly 3.1 million shares of the company owned by investors.
At closing, the Wilands would pay off the principal balance of a promissory note of approximately $1.3 million, plus all accrued interest. A committee is evaluating this offer as part of its evaluation of strategic alternatives for the company.
The Wilands, who already have a 41% stake in the company, would not comment. But Claire Gruppo, managing director/president of Gruppo, Levey, & Co., confirms that the Wilands’ bid is being considered by the board, along with other proposals. Gruppo says that the board wants to move quickly on a decision, most likely before Concepts Direct’s first quarter ends on March 31.
Concepts Direct, whose titles include stationery book Colorful Images and gifts catalogs Linda Anderson, Snoopy Etc., and The Music Stand, has not had a great year. The cataloger has trimmed circulation by more than 10% and faces possible delisting from Nasdaq. In July, it cut 27% of its work force, about 100 employees, because of lower-than-expected sales and higher costs. Sales for the quarter ended Sept. 30 (the most recent available at press time) were $10.6 million, down 6% from $11.2 million for the third quarter of 2001. Worse, its third-quarter net loss swelled from $856,000 to $2.5 million.