Middleton,WI-based cataloger WinterSilks, which had filed for Chapter 11 bankruptcy protection last July, was acquired in late February by Jacksonville, FL-based Venus Swimwear for $5 million (including financial help it had given WinterSilks earlier). WinterSilks, which sells silk sweaters, long johns, underwear, and sleepwear, had revenue of $34.8 million for the fiscal year ended June 30, 1998.
“We’ve been looking for a counter-seasonal catalog like WinterSilks for about five years,” says Daryle Scott, president of Jacksonville, FL-based Venus, which sells women’s swimsuits. “Our catalog is very seasonal, and we were looking for a fall/winter business. WinterSilks’ peak season begins in September and ends in January, so the fit is perfect.”
WinterSilks president Chris Vig agrees. “From an operating synergies standpoint, it’s as close a match as anything I’ve looked at in the past 15 years as a possible partner.”
Neither Vig nor Scott expects to make any creative or merchandising changes to WinterSilks. But most of its operations will be moved from Middleton to Jacksonville. “We can plug WinterSilks into our 65,000-sq.-ft. operations facility in Jacksonville,” Scott says. Vig expects the integration to be completed by July 2.
Eight merchandise and marketing employees, along with Vig, will remain in Middleton. Another 6-10 employees will move down to Jacksonville. The remaining 100-plus WinterSilks employees will be laid off.
Financial woes Vig blames WinterSilks’ financial problems on its expansion into higher-priced, trendier fashions, particularly via the women’s apparel Silk Collections spin-off, which the company shut down last year. “The new line was probably too expensive and too fashion-forward for our customers,” Vig says.
The company filed for Chapter 11 when its major lender, American National Bank & Trust of Chicago, refused to extend the cataloger credit for the 1998 holiday season. WinterSilks listed $5.2 million in assets and liabilities of $7.1 million.
In August 1998, San Diego-based Graham Webb International (GWI), a haircare products distributor that also owns women’s apparel catalog California Style, had given WinterSilks $3.7 million to keep the company afloat, and last fall had negotiated to buy the cataloger. GWI did not return calls to discuss why the negotiations fell through.