Cataloger/retailer Delia’s announced Monday it sold its extreme-sports gear merchant CCS to Foot Locker for $102 million in cash.
Besides CCS, the direct segment of Delia’s includes the catalogs and Websites of teen girls apparel brands Delia’s and Alloy. The brands target consumers between the ages of 12 and 19.
Founded in California in 1985, CCS sells skateboard footwear, apparel and accessories through catalogs and the Internet. Its revenue is projected to exceed $80 million in 2009; more than 80% of CCS’ sales are made online.
CCS is currently managed by a team based in New York led by Susan Van Arsdale, who will remain with CCS as managing director. Delia’s CEO Robert Bernard said in a release: “We are pleased with the opportunity to significantly strengthen our balance sheet and achieve the valuation afforded to the CCS brand, particularly in this uncertain economic environment.”
Foot Locker chairman/CEO Matthew D. Serra said in a release that “The impending purchase of CCS is in line with one of our strategic priorities–pursuing the acquisition of athletic footwear and apparel retailers that are compatible with our existing portfolio of businesses.”
Why would Delia’s sell CCS? “The sale was prompted by the strong performance at Delia’s 2008 vintage new stores, and the real estate opportunities at hand for the core Delia’s brand,” says Lee Helman, managing director with investment firm Financo, which acted as the exclusive financial adviser to Delia’s for the sale of the CCS business.
“Management was spread thin across four different concepts, and it has been the consistent mantra of management to focus on the core Delia’s concept,” Helman says. CCS was “an exceptional performer, and the sale enables management to find a home for the brand to continue to thrive.”
The use of the sale proceeds has not been fully determined, “but given the success of recent Delia’s store openings, and its back-to-school merchandise, it would not be unexpected to see Delia’s take advantage of retail opportunities within its core Delia’s brand over the next three or so years,” Helman says
For Foot Locker, “skate is a category that very much has a lot of momentum in the marketplace,” Helman says, and the CCS deal will make Foot Locker the dominant skate and surf cataloger/e-tailer. Foot Locker has the platform and resources to accelerate the growth of CCS beyond what Delia’s has done historically, “which was a very consistent and measured growth plan,” he notes.