Good deals, bad deals

A Flurry of Multichannel M&A activity took place during the past few weeks. Some of these transactions were happy ones, relatively speaking, in that they brought shuttered catalog brands back to life.

For instance, after filing for Chapter 11 in March and suspending operations in April, Home Bistro was purchased by DineWise in June.

Home decor cataloger TouchStone was in the process of shutting its doors this past spring when it was acquired in early June by Gardens Alive!

There’s also Venus Swimwear, which was sinking fast when German mail order company Bon Prix bought it in July.

Some of the deals were strategic — Dress Barn buying Tween Brands — while others are surprising. (Spiegel got sold? Again?)

And sadly, there’s the deal that didn’t get done: Smith & Hawken. Unable to sell the home and garden products merchant it acquired five years ago, Scotts Miracle-Gro Co. gave up on the brand in July. Smith & Hawken’s catalog and Web business is already gone; all stores will be closed by the end of the year.

It’s hard to blame Scotts for unloading Smith & Hawken, which had been a drain on the company for years. You have to feel bad for Smith & Hawken, though: Scotts wanted an entrée to the upscale hardgoods retail business when it bought the cataloger/retailer in 2004. But then as the recession took hold, Scotts decided the grass-seed business was greener.

Why was Smith & Hawken struggling? Consumers perceived the brand as expensive, and that was a problem in this recession — and in this product category. If you have to trade down somewhere, gardening tools and accessories are widely available elsewhere for less.

And as brand consultant Robert Passikoff points out in our story on page 7, “In this economy, expensive outdoor furniture is the last thing on many consumers’ minds.”

Yet if Smith & Hawken had offered lower-quality, cheaper garden goods, it would have lost its brand positioning. So the merchant was in a no-win situation, and it lost.

And after a 30-year run in this business, that’s sad.

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