San Francisco-based private equity firm Golden Gate Capital Corp. has made no secret about its intention of building a billion-dollar family of apparel companies. On Sept. 6 it appeared to have reached its goal. Golden Gate announced the acquisition of Irvine, CA-based women’s apparel merchant Carabella Corp., which consists of the Carabella and A.B. Lambdin women’s apparel businesses.
Carabella and A.B. Lambdin will become part of New York-based Spiegel Brands, which itself is part of Golden Gate’s Catalog Holdings division. Terms of the transaction were not disclosed.
New York-based Spiegel Brands is the parent company of the Spiegel apparel and home decor catalog and women’s apparel mailer Newport News. Golden Gate acquired Newport News and Spiegel in the summer of 2004. It bought two additional women’s apparel merchants, Appleseed’s and Draper’s & Damon’s, in November 2005, and apparel and gifts cataloger Norm Thompson Outfitters in March 2006. Carabella Corp. had purchased Americus, GA-based A.B. Lambdin in November 2006.
Both Carabella and A.B. Lambdin specialize in swimwear, which is also a major category for Newport News. Carabella, however, caters to women in their 20s and early 30s, while A.B. Lambdin targets women 30-55. Carabella has a more sizable fall and winter business than A.B. Lambdin, thanks to its expansion into eveningwear, casual clothing, and shoes.
“The only thing surprising” about Golden Gate’s latest acquisition, says Craig Battle, managing director at Princeton, NJ-based investment bank Tucker Alexander, is the relatively small size of Carabella Corp. Estimated annual sales for Carabella and A.B. Lambdin are $30 million. In comparison, Golden Gate’s previous catalog acquisition, Norm Thompson, had annual sales of roughly $200 million.
“But the guys at Golden Gate have made it clear to the world that they’re interested in every apparel catalog that exists in the United States,” Battle continues. “I think they’re looking at every single one.”
As for the deal itself, Battle says, “it’s an interesting add-on to the Newport News/Spiegel group.” Carabella, Battle says, offers a younger customer that “probably fits with what Newport News is doing… With the talented management team led by Geralynn [Madonna, CEO of Spiegel Brands], they must think adding this will resonate with their customers.”
Madonna, in fact, tells MULTICHANNEL MERCHANT that the acquisition offers Spiegel Brands “a great opportunity to own a larger share of the growing swimwear market and capitalize on the synergies with our existing businesses.” Spiegel Brands, she says, was attracted to Carabella Corp. because of the “tremendous growth potential of the Carabella and A.B. Lambdin brands in both swimwear and travel merchandise.”