Current USA said its deal to buy troubled gifts merchant Lillian Vernon will close Thursday, and that it will keep the Virginia Beach, VA-based company’s operations center open.
Lillian Vernon CEO Michael Muoio said officials at Current, a division of privately-held Taylor Corp., told employees in Lillian’s merchandising and marketing department that their jobs would be moved to Current’s offices in Colorado Springs, CO.
But on Monday, Current also began interviewing to fill an undisclosed number of positions in the Virginia Beach operations center.
“For many people today there was a sigh of relief,” Muoio said. “But for some people, the ones not making the move to Colorado, there wasn’t. It’s a mixed bag.”
Muoio said just a “handful” of people would be affected by the move. Muoio said he has until Tuesday to let Current know whether he will stay on board as a consultant for Lillian Vernon, which will become a division of Current.
Lillian Vernon, which filed for bankruptcy protection in February, agreed to be sold to Current on April 3. The purchase price is $15.8 million, excluding adjustments relating to inventory and personal property, according to a sales contract filed with the U.S. bankruptcy court in Wilmington, DE.
Founded in 1951, Lillian Vernon sells products such as housewares, children’s products, deco, gifts, and jewelry. The business shrank in the past 10 months: Lillian Vernon employed about 564 workers as of the end of last June and currently has about 80.
The cataloger, which has been owned by Sun Capital Partners since May 2006, had reached a tentative agreement last month to sell the business to Lemont, IL-based cataloger Creative Catalogs Corp. – which owns personalized gifts merchant Personal Creations.com – for a base price of $9.3 million.
But Lillian Vernon officials were granted permission to hold an auction to gauge buying interest in the company, and Current came through with a better offer. In addition to Current, its Mankato, MN-based parent company Taylor Corp. includes the G. Neil, Paper Direct, and Sa-So catalog titles. Taylor’s direct sales for last year were about $700 million.