Distressed food gifts merchant Wisconsin Cheeseman was snapped up by Swiss Colony parent company Colony Brands earlier this week.
The Dane County (Wisconsin) Circuit Court approved the sale of Wisconsin Cheeseman by parent firm by Wisconsin Food Gift Co. to Colony Brands on Monday for $550,000, according to court documents. The acquisition includes the brands, assets and inventories of Wisconsin Cheeseman.
According to Wisconsin Chapter 128 paperwork filed with the Dane County Circuit Court, Wisconsin Food Gift owes $110,000 to Jim’s Cheese Pantry, $37,000 to Dynamic Print Group and $27,000 to Uline Shipping Supplies.
Chapter 128 is not considered bankruptcy under Wisconsin state laws, but does declare a company or person to be “insolvent.” Under Wisconsin’s Chapter 128 laws, a petitioner has three years to pay off its creditors. This is done through a court-appointed trustee, and on a monthly basis.
Colony Brands president/CEO John Baumann says he’s excited about the acquisition and he sees Wisconsin Cheeseman as a ” smaller clone” of Swiss Colony.
Swiss Colony has a history in the food and gifts business just like Wisconsin Cheeseman, Baumann says. The acquisition “should fit us like a glove,” he adds. “And it gives us additional volume in our cheese operation.”
Baumann admits the Wisconsin Cheeseman buyer file is not extremely large (its 12-month buyer file has just 71,572 names, with a $70 average order value), “but it’s one we think we can build profitably. According to its data card, Swiss Colony has 1.7 million 12-month buyers that spend an average of $95 per transaction.
For now, it will be status quo for Wisconsin Cheeseman, Baumann says. “We’ll keep the catalog on schedule and try to do some testing,” he says. “In the short term, we’ll hold the circ to what it was in 2010.”
For the longer term, Baumann notes, “we’ll see if we can grow the business because there are a reasonable amount of synergies between the two files. But for the short term, there won’t be many significant branding or merchandising changes.”
Though its buyer file is tiny in comparison, Lois Brayfield, president of catalog consultancy J. Schmid, says Colony Brands should put the Wisconsin Cheeseman file up against Swiss Colony’s to see how much duplication there is.
“I’ve often found it quite surprising how little duplication there is between two similar brands,” Brayfield says.
Tony Cox, president of food catalog consultancy 5th Food Group, says Colony Brands should be able to make back its $550,000 investment in no time.
“They picked up $6 million to $7 million in additional annual sales for $550,000, that’s a great deal,” Cox says. “Colony Brands obviously already has the infrastructure and management team in place to support this add-on business, so they get the sales boost with little or no increase in their fixed costs or overhead.”