Versa Capital Management has launched a new retail platform called the Vestis Retail Group which is comprised of two current Versa portfolio companies, Bob’s Stores and Eastern Mountain Sports.
Bob’s Stores sells value-oriented footwear, apparel, work wear and accessories. Bob’s Stores was founded in 1954 and is based in Meriden, CT (www.bobstores.com).
Eastern Mountain Sports (EMS) is an operator of 68 retail stores in the Northeast US that sell brand name and private label outdoor apparel and equipment. The company also sells its products online through its website (www.ems.com). EMS was founded in 1967 and is based in Peterborough, NH.
As part of the Vestis Retail Group, Bob’s and EMS will share certain operational functions and enterprise resource planning systems, but will remain separate and distinct retail brands in stores, merchandise and online. By combining Bob’s and Eastern Mountain Sports the Vestis platform now has over 3,200 employees and nearly $500 million in revenue both online and through over 100 stores in 12 eastern states.
“We believe the retail industry for outdoor apparel and gear holds great promise, and our firm has been active in the space for many years,” said Greg Segall, CEO of Vestis’ controlling shareholder Versa Capital. “We are committed to ensuring that each of our companies in the space – including Bob’s and EMS – have the resources and infrastructure to achieve sustainable success in this dynamic sector over the long term.”
The capitalization and working capital requirements of Vestis will be supported by a new $95 million revolving credit facility provided by Wells Fargo Bank.
Mark Walsh, CEO of Bob’s and a Versa Principal, has been named CEO of Vestis. Will Manzer has stepped down as CEO of EMS and he will serve as a consultant to Mr. Walsh during a transitional period. Working closely with Mr. Walsh to oversee EMS’s day-to-day operations in Peterborough, NH will be Garry Herdler, interim CFO of Vestis.
EMS is closing its distribution facility and several other back-office support functions in Peterborough, NH. EMS currently plans to maintain its merchandising, product design, call center and web operations in Peterborough, NH, and its climbing, paddle and outdoor schools in New England.
The moves are designed to improve EMS’s operating efficiency, inventory management and capacity to invest in the continued development and success of its brand. The company’s distribution function will be consolidated within Bob’s existing distribution facility in Meriden, CT. These changes will commence immediately and will be finalized over the next five months.
“The steps we have taken at EMS are difficult ones, but we believe they are in the best long-term interests of the business,” said Mr. Walsh. “We thank all EMS employees for their hard work and dedication, and we are committed to supporting the affected employees in seeking new opportunities both within and outside of the company. Will’s product and industry knowledge are superior, and he will be of great help to me as I work with the EMS team to ensure the strength of the EMS brand with outdoor enthusiasts. The Vestis platform will enable us to improve the operations of Bob’s and EMS while growing each business independently with separate customer and brand strategies.”
Versa Capital Management invests in special situations involving middle market companies with revenues in the $100 million to $1 billion range or assets of $25 million to $500 million. The firm has $1.2 billion of capital under management and is based in Philadelphia (www.versa.com).
© 2013 PEPD • Private Equity’s Leading News Magazine • 2-1-13
