San Francisco-based private equity firm JH Partners acquired $75 million Chef’s Catalog from Dallas-based Neiman Marcus Group. Neiman Marcus had put the kitchenware title up for sale in May.
Jon Medved, former CEO of gifts and housewares mailer Walter Drake, will become CEO of Pikes Peak Direct Marketing, the corporation formed by JH Partners for the transaction. According to Medved, Chef’s Catalog’s operations will move to Colorado Springs, CO, in the spring. In the interim, it will continue to operate from Dallas.
Neiman Marcus expects to record a pretax loss of $15 million-$17 million in its fiscal second quarter. New York-based Elixir Advisors advised The Neiman Marcus Group in the transaction.
In the five years that Neiman Marcus owned Chef’s Catalog, the kitchenware market has become increasingly competitive. What’s more, Chef’s Catalog’s margins were lower than those of Neiman Marcus’s other titles, which include high-end home de cor catalog Horchow. In recent years Chef’s Catalog tried to introduce more private-label and tabletop items and giftware, but apparently customers did not respond to the offerings as well as the company had hoped.
Katherine Galligan, vice president of research for Dallas-based research and trading firm Aperion Group, believes that Chef’s Catalog has the chance for growth under new management. “Now that it’s in the hands of someone who can put some money and resources behind it, the brand may be able to realize it’s true potential,” she says.
No stranger to the catalog industry, JH Partners has also invested in Peet’s Coffee & Tea, Performance Bicycle Shop, and Design Within Reach.