Edgewater, NJ-based multititle mailer Hanover Direct has agreed to sell its upscale Gump’s division to a consortium of three firms: San Francisco-based venture-capital firm WaldenVC, Beverly Hills, CA-based Stone Canyon Venture Partners, and New York-based private-investment firm Sand Springs Holdings for approximately $8.5 million.
The deal is expected to be finalized in March. The sale includes Gump’s San Francisco store, its catalog, and its Website.
Hanover has owned Gump’s, which sells luxury gifts, art, jewelry, linens, home furnishings, and fragrances, since 1993. Gump’s president Jed Pogran will lead the company after the sale.
According to a source familiar with the company, Gump’s did about $25 million in retail sales and about $20 million in direct sales two years ago. At that time, earnings before interest, taxes, depreciation, and amortization totaled about $4 million.
During the past few years, the $415 million Hanover has put a number of its titles, including International Male and Silhouettes, on the selling block, only to pull them back when the company couldn’t get a favorable offer.
Industry observers suggest that more divestitures could be forthcoming at troubled Hanover. Earlier this month, its shares were halted on the American Stock Exchange because of a failure to comply with the exchange’s filing requirements.
In other Hanover news, the company announced it will be moving its executive offices and consolidating its New Jersey operations under one roof at its Weehawken, NJ-based facility. Hanover extended its Weehawken lease for 10 years and will close its Edgewater, NJ-based headquarters by May 31 when its lease will end.
It also announced that it will be moving its International Male business to Weehawkenand will incur a $900,000 one-time charge in the fourth quarter in connection with the relocation.