Sailing Innovation (US), a consortium led by Sailing Capital Overseas Investment Fund along with a financing commitment from GE Capital, has been selected as the winning bidder for Brookstone for a final purchase price of $135.7 million, net of cash and assumed liabilities. Under Sailing Innovation, Brookstone will continue to operate as a stand-alone company and brand. The sale is subject to bankruptcy court approval and is expected to close by early July, 2014.
“This is a very exciting day for Brookstone. We were looking for a strong strategic partner who shares our vision and passion for Brookstone’s next phase of growth. We have found these qualities in Sailing and are thrilled about the opportunity to begin leveraging the resources of their global partners, including Sanpower Group in China. We will emerge from Chapter 11 as a healthy company with a bright future, and look forward to servicing our customers for years to come,” said Jim Speltz, President and Chief Executive Officer of Brookstone.
Brookstone is a product development company and multichannel lifestyle retailer. The company operates approximately 240 stores in the United States and Puerto Rico. Typically located in high-traffic regional shopping malls and airports, the stores feature unique and innovative consumer products. Brookstone also operates an e-commerce business that includes the Brookstone catalog and Brookstone.com. The company was founded in 1965 and is based in Merrimack, NH (www.brookstone.com).
Sailing Innovation (US) is an investment vehicle led by Sailing Capital Overseas Investment Fund, the first large cross-border RMB private equity fund launched in China. The fund, established by Shanghai International Group, engages in direct private equity investments and can participate throughout the capital structure — equity, structured finance, mezzanine and/or debt — for buy-out, control or significant minority positions. The firm is based in Hong Kong (www.sailing-capital.com.hk).
“Brookstone is an icon of American innovation. Sailing is keen to retain and build upon the strong brand equity of Brookstone to reignite its historical roots in delighting and exciting customers with unique and innovative products. We are committed to strengthen Brookstone’s operations in the US,” said James Liu, President and CEO of Sailing Capital Advisors. “To this end, we will work with Brookstone’s management and team to enhance R&D capabilities, blaze new trails with cutting-edge products, rejuvenate its stores and motivate the sales team.”
“There remains a great thirst all around the world for what Brookstone can offer,” said Mr. Liu, “we will also expand Brookstone’s footprint beyond the US. As part of this strategy, our partner, Sanpower Group, will assist Brookstone in penetrating the fast-growing China market as well as establishing a presence in the UK. We believe the opportunities ahead for Brookstone are simply immense.”
Sanpower Group, founded in 1993 and based in Nanjing, China, is a business conglomerate which owns two of China’s leading retail assets – Hiteker and Cenbest. Hiteker is ranked 15th out of the top 100 retailers in China by the China Chain Store and Franchise Association. Focused on IT products and services, it has over 350 retail outlets across 13 provinces in China. Cenbest, located in Xinjiekou, Nanjing, is one of the top 10 department stores in China (en.sanpowergroup.com).
Brookstone’s legal advisor for the restructuring is K&L Gates and its financial advisor is Deloitte CRG. Jefferies is the company’s investment banker, and has provided advice on the restructuring and sale of the company. The legal advisor to Sailing is Gibson Dunn & Crutcher and the financial advisor is Houlihan Lokey.
2014 PEPD • Private Equity’s Leading News Magazine • 6-4-14