Despite having taken what its executive chairman Bill End referred to in August as “a lot of missteps over the past 18-24 months,” multititle mailer Cornerstone Brands secured an additional $50 million line of credit on Oct. 24. Boston-based Wells Fargo Retail Finance is the lender.
The $485 million Cornerstone “has had a lot of issues over the past 12-24 months,” says Andy Moser, senior managing director/co-chief operating officer for Wells Fargo Retail Finance. “Cornerstone management has made a lot of headway in cutting through these issues. The numbers haven’t been pretty, but we’re optimistic about the company’s plans for the future…. We don’t lend on history.”
With the funding, End says, “we’ll certainly try to grow the individual businesses next year, and we will consider acquisitions.” He insists that the Westchester, OH-based Cornerstone has no plans to sell any of its six titles — home products and decor catalogs Ballard Designs, Frontgate, and Smith & Noble, home textiles and apparel title Garnet Hill, and apparel books The Territory Ahead and TravelSmith. Cornerstone sold a seventh catalog, Whispering Pines, in early 2000 back to its original owners, Mickey Kelly and Susan Kelly Panian.
Cornerstone’s Westchester distribution center had been a financial drain on the company. But since assuming fulfillment of cataloger French Country Living earlier this year, the facility has been at 60%-plus capacity. “We’ve considered the possibility of taking on one or two additional fulfillment contracts, and we will do that if we find the right partner,” End says. “We’re in discussions with one or two right now.”
Several sources have said that Ballard Designs has struggled throughout the past year and could be closed down or sold soon. But End says that despite some recent management changes, the catalog is “running along fine.” Ballard president Lawrence Lee resigned from the company in early September for personal reasons. John Osteen, director of Frontgate, replaced him on an interim basis. Meanwhile, former Lands’ End and J. Peterman executive Russ Gaitskill was hired in August as CEO of Garnet Hill.
End is also optimistic that a lawsuit filed earlier this year by the minority owners of TravelSmith will be settled soon. TravelSmith founder Chuck Slaughter and his partner Scott Sklar sued Cornerstone for defaulting on a stock transaction with them. Cornerstone countersued, contending that Slaughter and Sklar had withheld information at the time of the transaction. “I don’t see the lawsuit having a negative effect on the company or breaking it up,” End says.