The Third Quarter was a Busy One with 16 deals, compared to 13 last year. Many transactions were strategic in nature, including Harry & David Holdings acquiring Cushman Fruit, Gap buying Athleta, and Foot Locker snapping up CCS.
Then again, others — such as Swiss Colony acquiring DMSI and a hedge fund buying Popular Club — were distress sales.
Redcats sheds Missy division
When: July The facts: Multititle mailer Redcats USA in July 28 sold its Missy division (Chadwick’s, Metrostyle and Closeout Catalog Outlet) to private equity firm Monomoy Capital Partners. Terms of the deal were not disclosed. Redcats USA now includes the Woman Within, Roaman’s, Jessica London and King Size apparel catalogs, two BrylaneHome titles, plus The Sportsman’s Guide, The Golf Warehouse and United Retail Group. The skinny: David Solomon, managing director for investment bank Lazard Middle Market, says Monomoy is a “well-known distress buyer. Missy Brands was underperforming, which may be symptomatic of a larger theme.”
Swiss Colony acquires DMSI
When: August The facts: Midwest Catalog Brands, a subsidiary of Swiss Colony, bought the bulk of Direct Marking Services Inc. (DMSI) for $15.5 million at a public auction. The purchase includes the Montgomery Ward brand, and the Charles Keath and HomeVisions catalogs and Internet properties. Swiss Colony president John Baumann says Midwest Catalog Brands was created to encompass the DMSI brands. The skinny: Swiss Colony has 12 titles, “with a number of titles very quietly growing under the radar,” Solomon says. “You don’t hear about [Swiss Colony] buying things often, but they’ve been very consistent.”
Golden Gate sells Spiegel Brands
When: September The facts: Catalog Holdings quietly announced the sale of Spiegel Brands to an investor group led by Granite Creek Partners for an undisclosed price. Spiegel Brands owns and operates catalogs under the Spiegel, Newport News, Carabella and A.B. Lambdin fashion apparel brands. Catalog Holdings is a portfolio company of Golden Gate Capital. But Golden Gate also added to its empire when its Orchard Brands unit, which sells apparel and home products for the 55-and-over market, in September bought the eight Crosstown Traders apparel titles. The skinny: Granite Creek tends to invest $10 million in equity, Solomon says, so even though the terms were not disclosed, it’s probably not a large transaction.
| Company | Market segment | Buyer/investor | Investment form | Est. price (in millions) | |
|---|---|---|---|---|---|
| JULY | Cone Instruments | Medical imaging equipment | Supply Chain Equity Partners | Acquisition | — |
| EStyle | Children’s clothes, toys and accessories | Right Start Acquisition Co. | Acquisition | — | |
| Highsmith | Library and school furniture and equipment | Lab Safety Supply | Acquisition | $27.0 | |
| Redcats Missy Division | Apparel, home goods | Monomoy Capital Partners | Acquisition | — | |
| AUGUST | As We Change | Women’s apparel, personal care products | Blyth | Acquisition | $2.3 |
| Cushman Fruit | Fruit and specialty food gifts | Harry & David Holdings | Acquisition | — | |
| Direct Marketing Services Inc. | General merchandise | The Swiss Colony | Acquisition | $15.5 | |
| Popular Club | General merchandise | Unnamed hedge fund | n/a | — | |
| Westcon | Calibration and measurement tools | Transcat | Acquisition | $7.2 | |
| SEPTEMBER | Café Belmondo | Coffee | Boca Java | n/a | — |
| Drago Supply Co. | Industrial supplies and hardware | Motion Industries | Acquisition | — | |
| Crosstown Traders | Apparel and accessories | Golden Gate Capital | Acquisition | $35.0 | |
| Spiegel Brands | Apparel and home furnishings | Granite Creek Partners | Acquisition | — | |
| Star Struck/ProTeam | Sports team apparel and collectibles | Dreams | Acquisition | — | |
| Athleta | Women’s sportswear | Gap | Acquisition | — | |
| CCS | Skateboards, extreme sports gear | Foot Locker | Acquisition | $102.0 |
Sources: Lazard Middle Market/MCM