The Second Quarter Saw Some Action in terms of mergers and acquisitions. Twenty transactions were recorded for the period, compared with 14 for the quarter of 2007. The slow economy, combined with rising costs, has resulted in several distress sales — such as Lillian Vernon, Sharper Image and Celebrate Express. There might have been more deals if not for the recent credit crunch, says David Solomon, co-CEO of New York-based investment firm Lazard Middle Market, which tracks transactions for Multichannel Merchant.
Current USA acquires Lillian Vernon
When: April The facts: Lillian Vernon Corp., which had filed Chapter 11 in February, was sold to Current USA, a subsidiary of Taylor Corp., $15.8 million. Most of Lillian Vernon has moved to Current’s Colorado Springs, CO, facility, except its distribution center in Virginia Beach. The skinny: Taylor Corp. will have good synergies with Lillian Vernon, Solomon says. “Lillian struggled with the complexity of its personalization platform.” If you can’t fulfill it, “you’ll have problems on margin sides by driving up fulfillment costs.”
1-800-Flowers.com Buys DesignPac
When: April The facts: Multititle mailer 1-800-Flowers.com acquired gourmet gift baskets marketer DesignPac Gifts for $36 million. DesignPac will retain its senior management and become a wholly owned subsidiary of 1-800-Flowers.com, which includes the HearthSong, Plow & Hearth, The Popcorn Factory, and Cheryl & Co. catalogs. The skinny: The deal will enable 1-800-Flowers.com to improve its gourmet gift bag offering. “It gives them design and sourcing capability,” Solomon says.
Liberty Media gets Celebrate Express
When: June The facts: Party gear and costumes merchant Celebrate Express was sold to holding company Liberty Media for $31 million in cash. Celebrate Express will be folded into Buyseasons.com, a Web retailer acquired by Liberty Media in 2006. The skinny: “Liberty is putting together a powerhouse in Internet,” Solomon says. “That’s where all the action is in retail, because catalogs are suffering under heavy postage and paper costs.”
| Company | Market segment | Buyer/investor | Investment form | Est. price (in millions) | |
|---|---|---|---|---|---|
| APRIL | Gerard & Dominique Seafoods | Seafood products | Seabear Co. | Acquisition | — |
| DesignPac Gifts | Gourmet gift packs | 1-800-Flowers.com | Acquisition | $36 | |
| Hobby Horse Clothing | Western show apparel and accessories | Dover Saddlery | Acquisition | $0.40 | |
| Lillian Vernon | Personalized gifts | Current USA | Acquisition | $15.80 | |
| Pittman & Davis | Orchard fruits, gourmet items | Hale Indian River Groves | Acquisition | — | |
| MAY | Bits and Pieces | Gifts and games | Gardens Alive! | Acquisition | — |
| MacKenzie-Childs | Tabletop ceramics | Twin Lakes Capital | Acquisition | — | |
| MH&SC | Healthcare and safety products | Vision Opportunity Capital Management | Acquisition | $0.50 | |
| Sharper Image Corp. | High-tech gifts, gadgets | Hilco Consmr. Cap. Corp. & Gordon Bros. Grp. | Acquisition | $49 | |
| JUNE | Arrington Police Distributors | Public safety and police equipment | Streicher’s | Acquisition | — |
| Celebrate Express | Party supplies and costumes | Liberty Media Interactive | Acquisition | $31.20 | |
| Corporate Express | Office products | Staples | Acquisition | $2,600,000 | |
| Dahle’s Big and Tall | Men’s clothing | Casual Male Retail Group | Acquisition | — | |
| Lash International | Aftermarket automotive products | Eckler Industries | Acquisition | — | |
| MH&SC | Healthcare and safety products | Juhl Wind | Acquisition | — | |
| Nau | Lifestyle apparel manufacturer/marketer | Horny Toad Activewear | Acquisition | — | |
| Oilind Safety | Rental safety equipment and services | Airgas | Acquisition | — | |
| Red Envelope | Gifts | Provide Commerce | Acquisition | — | |
| Refron | Refrigerants | Airgas | Acquisition | — | |
| R. & R. Manufacturing | Electronic hardware components | MW Industries | Acquisition | — | |
| Sources: Lazard Middle Market/MCM | |||||