Children’s apparel and toys cataloger/retailer The Right Start announced July 18 it acquired Babystyle and Blue Lava Group, which owns the Tiny Ride Website. Terms were not disclosed.
Company officials said in a release that both Babystyle and the Tiny Ride Website would be incorporated under the Right Start corporate umbrella; the Right Start and Babystyle brands will be marketed separately. Babystyle includes a Website and 11 stores–six of which are in California–and the Cadeau Maternity store in New York.
Founded in 1985, The Right Start is owned by Hancock Park Associates, a Los Angeles-based investment firm. Kenton Van Harten, a partner at Hancock Park Associates, Right Start’s primary investor, was named CEO in May.
Hope Neiman, formerly senior vice president of marketing and strategy, was named chief operating officer at the same time. The company just closed its fiscal year with growth in both same-store sales and double-digit growth in its overall business.
Neiman tells MULTICHANNEL MERCHANT that the acquisition was “not a case of buying share.” Rather, “we are on a growth path,” she says. “Both acquisitions were a combination of opportunity, and the fact that each brought a different piece to the mix that allowed us to be very synergistic in our approach.”
She says the Tiny Ride Website carries with it online expertise “that we very much needed inhouse, but they have never cross marketed other categories to their audience. Babystyle brings highly educated prenatal moms, as well as a private-label expertise.”
Furthermore, Babystyle specializes in soft goods, while Right Start focuses more on hard goods. “Together, the three represent a good deal of give and take in cross marketing,” Neiman says.
The Right Start, which had folded its catalog in 2003, brought the book back during Christmas 2005. “We have been growing it in a very controlled way, ensuring profitability and incorporating small tests with established practices we have learned,” she explains.
The two deals “closed a bit late for some of our holiday plans, though we will be expanding by about 100,000 [catalogs] this holiday as a result of the acquisitions,” she notes. “That is far more than we have added at each mailing.”
Chris Shannon, a managing director at investment firm Berkery, Noyes & Co., says the Right Start conducted a review of its business about year ago and formulated a plan to control a market segment. “The recent acquisitions in the infant segment display this ongoing strategy,” he says.
Lee Helman, a managing director with investment bank Financo, says the acquisition “probably allows The Right Start to leverage its infrastructure and eliminate redundant duplicative costs.”
What’s more, Babystyle tends to focus on pregnant mothers with more fashion-forward merchandise, he notes, “so there are definitely opportunities for cross-marketing that could be exciting.”