Westchester, OH—Despite having taken what its executive chairman Bill End referred to in August as “a lot of missteps over the past 18-24 months,” $485 million multititle cataloger Cornerstone Brands secured an additional $50 million line of credit on Oct. 24. Boston-based Wells Fargo Retail Finance is the lender.
With the funds, End says, “we’ll certainly try to grow the individual businesses next year, and we will consider acquisitions.” He reiterated a comment he made in August that despite a rocky year, Cornerstone has no plans to sell any of its six titles–Ballard Design, Frontgate, TravelSmith, Garnet Hill, Smith & Noble, and The Territory Ahead.
As for the financial drain that its underused distribution center has put on the company, End says that the facility is 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,” he says. “So far, we’re in discussions with one or two right now.”
Several sources say that home furnishings title Ballard has struggled throughout the past year and could be on its way out. But End characterizes the company as being in a turnaround mode. “There are a number of new folks there, and it’s running along fine,” he claims. Ballard president Lawrence Lee resigned from the company in early September for personal reasons. John Osteen, director of home goods title Frontgate, has replaced him on an interim basis. Meanwhile, former Lands’ End and J. Peterman executive Russ Gaitskill was recently hired as CEO for apparel and home textiles catalog Garnet Hill.
End is also optimistic that a lawsuit filed earlier this year by the minority owners of travel clothing catalog TravelSmith—as well as Cornerstone’s countersuit—will be settled soon. “It will get resolved,” End says. “I don’t see it having a negative effect on the company or breaking it up from the company.” 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.