consumer retail

Brentwood Associates has acquired Z Gallerie, a multi-channel retailer of home goods.  The company will continue to be led by its three founders, Joe Zeiden, Carole Malfatti and Mike Zeiden.

“Z Gallerie is a differentiated retailer in the home furnishings market with a very unique merchandise assortment. We see a significant opportunity to accelerate growth of the current retail store base, while also dramatically increasing the company’s direct marketing efforts, both online and offline,” said Steve Moore, a partner at Brentwood.

Z Gallerie is a retailer of a variety of home goods, including furniture, artwork, lighting, tabletop items, textiles and decorative accessories. The company operates 55 retail locations across 20 states, and has a growing e-commerce business.  Z Gallerie was founded in 1979 and is headquartered near Los Angeles in Gardena, CA (www.zgallerie.com).

“Joe, Carole and I are proud of what we have achieved over the last 35 years and we are excited to partner with a value-added team like Brentwood who understands our brand, unique position in the market and can help us continue to grow our business across multiple channels of distribution,” said Mike Zeiden.  “Brentwood’s experience and success in both the direct-to-consumer and retail channels will be a tremendous resource for Z Gallerie as we expand our brand and work towards achieving our full potential.”

KKR’s credit business and KeyBanc Capital Markets provided debt financing to support the acquisition.  Z Gallerie was advised by BMO Capital Markets, and its legal counsel was Skadden, Arps, Slate, Meagher & Flom.  Brentwood was represented by Greenberg Traurig on the transaction and Kirkland & Ellis on the debt financing.

“Z Gallerie is a great example of a company with an enthusiastic culture and strong management team delivering unique, on-trend product with a compelling value proposition. We are very excited to be partnering with the company and we plan to leverage the strength of the brand to execute on a significant growth strategy,” said Roger Goddu, partner with Brentwood Associates.

Brentwood Associates is a consumer-focused private equity investment firm with over $1 billion of capital under management. Sectors of interest include specialty retail; branded consumer products; consumer services; direct marketing, including direct mail and e-commerce; education; health and wellness; and restaurants.  Since 1984, Brentwood’s private equity team has invested in 46 portfolio companies with an aggregate transaction value of over $5 billion. The firm is based in Los Angeles (www.brentwood.com).

2014 PEPD • Private Equity’s Leading News Magazine • 10-20-14

Bruckmann, Rosser, Sherrill & Co. and Palladin Consumer Retail Partners have formed InMotion Entertainment Group and acquired all of the InMotion Entertainment, Soundbalance, and Headphone Hub branded entertainment and electronics airport retail businesses from Project Horizon, a subsidiary of Gate Petroleum Company. 

“We have been very impressed by CEO Jeremy Smith and his management team, who have successfully increased the company’s market share and strengthened its position in airport retail.  They have grown successfully by providing travelers with a broad selection of products and a great shopping experience,” said Tom Baldwin, a Managing Director of Bruckmann, Rosser, Sherrill & Co.

InMotion Entertainment Group is an airport-based retailer of headphones, mobile device accessories and other consumer electronics.  The company operates nearly 80 locations in airports across the United States under the InMotion Entertainment, Soundbalance, and Headphone Hub banners.  Products sold include electronics, including tablets, digital cameras, portable power, and noise-canceling headphones. InMotion Entertainment has exclusive airport partnerships with Beats by Dr. Dre, Bang & Olufsen, and Samsung. The company is based in Jacksonville (www.inmotionstores.com).

“Consumers are increasingly shopping at retail stores in airports and consumer electronics is one of the fastest-growing segments within airport retail,” said Mark Schwartz, CEO of Palladin.  “As one of the best-in-class operators, and one that caters to a very attractive demographic base, we believe InMotion has a tremendous opportunity to grow both domestically and abroad.”

Bruckmann, Rosser, Sherrill & Co. and Palladin have partnered in the past, most recently for Things Remembered, a retailer of personalized gifts with 600 stores worldwide, which they owned together from 2006 to 2012.

Bruckmann, Rosser, Sherrill & Co. (BRS) invests in middle market consumer goods and services businesses and has $1.4 billion of committed capital under management.  Since 1996, BRS has purchased over 40 portfolio companies for aggregate consideration of over $6.4 billion. In addition, BRS portfolio companies have completed approximately $1.9 billion of add-on acquisitions. Prior to forming the firm, the founders of BRS were in the financial acquisition business at Citicorp Venture Capital where they closed 25 transactions with aggregate transaction values totaling $5.8 billion.  The firm is based in New York (www.brs.com).

Palladin Consumer Retail Partners, previously known as Palladin Capital Group, invests exclusively in retail and consumer products companies in North America and Europe that have revenues ranging from $50 million to $500 million.  Palladin invests from $10 million to $50 million of equity capital in each transaction. Palladin is investing out of its current fund which was closed in April 2012.  The firm was founded in 1998 and is based in Boston (www.pcrp.com).

Fifth Street Finance provided debt financing and co-invested in the equity in the transaction.  Wells Fargo Securities acted as the exclusive financial advisor and Holland & Knight acted as legal advisor to Project Horizon.

© 2013 PEPD • Private Equity’s Leading News Magazine • 10-4-13

Fixtures Living, a retailer of lifestyle products for the home, has received an investment from Catterton Partners.

“Fixtures Living has developed a game-changing retail model,” said Scott Dahnke, Managing Partner at Catterton Partners. “By delivering a full-immersion retail experience that facilitates the relationship between consumers, trade professionals, and leading brands, the company has succeeded in creating a retail concept that is positioned to win. This concept is unlike any other that we have seen. We are excited to partner with the talented team at Fixtures Living to help the company realize its immense potential.”

Fixtures Living carries an array of best-in-class products for indoor and outdoor living spaces — kitchens, laundry rooms, and bathrooms. Unlike typical industry showrooms, Fixtures Living’ stores invite consumers to enjoy a 360 degree sensory experience that uses live kitchens and working bath fixtures (from decorative plumbing to entire health and wellness systems), and by recruiting and retaining a welcoming and knowledgeable staff who encourage guests to “Live Joyfully™.” The company currently has three showrooms in Southern California and plans to expand across the U.S. over the next several years, including adding two locations later this year – one in San Diego at the Westfield UTC luxury center and one in the Glendale Galleria. Fixtures Living was founded in 2009 and is based in San Diego (www.fixturesliving.com).

Chief Executive Officer Jeffery Sears and the current management team will continue to lead the company as it expands its presence across the country. Mr. Sears, along with co-founder and Chairman Jim Stuart, will retain a significant stake in the company.

“The Fixtures Living concept has created a new way for the consumer to choose lifestyle goods for the home. Our innovative approach is embraced enthusiastically by homeowners and industry professionals who appreciate the opportunity to test-drive products in an inviting and interactive setting. This fosters a connection between the visitor and the products that helps them create the types of moments they wish to share in their homes,” said Mr. Sears. “We look forward to working with Catterton, a partner with significant experience growing similar best-in-class retailers such as Restoration Hardware. Together, we are well-equipped to capitalize on the vast opportunity we see to fill a void in the current marketplace.”

Catterton Partners focuses exclusively on the consumer industry. The firm invests in all major consumer segments, including Food and Beverage, Retail and Restaurants, Consumer Products and Services, and Media and Marketing Services. Founded in 1989, the firm has more than $3 billion of capital under management and is located in Greenwich, CT (www.cpequity.com).

Valtus Capital Group (www.valtuscapital.com) acted as Valuation Advisor to Fixtures Living in connection with this transaction.

© 2013 PEPD • Private Equity’s Leading News Magazine • 3-1-13

Ares Management has signed an agreement to acquire a majority stake in Smart & Final, a multi-format retailer serving both households and smaller businesses and a portfolio company of Apollo Global Management, for $975 million. The senior management team of Smart & Final will own a minority stake in the company.

Ares Management has secured commitments from Morgan Stanley, Bank of America Merrill Lynch, Credit Suisse, and Deutsche Bank Securities to provide debt financing for the transaction.

“We are delighted to join Smart & Final’s senior management team as long-term investors in the company,” said David Kaplan, Senior Partner and Founding Member of Ares Management. “Smart & Final occupies an attractive position in the marketplace by delivering compelling value and merchandise to its loyal customers. We share management’s vision for the company and believe it is well positioned for future growth.”

Smart & Final is a smaller store, warehouse-style, “no membership fee,” multi-format retailer serving both households and smaller businesses. The company operates 235 stores under three formats: Smart & Final, Smart & Final Extra!, and Cash & Carry. The stores operate in six western U.S. states (California, Nevada, Arizona, Oregon, Idaho, and Washington), with an additional 13 joint-venture stores in northwest Mexico. Smart & Final is based in Commerce, CA (www.smartand final.com).

“We are looking forward to our partnership with Ares Management, whose strong, committed financial sponsorship and great track record in the retail sector speak for itself,” said Dave Hirz, Smart & Final’s President and Chief Executive Officer. “The entire senior management team of Smart & Final is very excited about having Ares’ support in further building Smart & Final into a world-class organization.”

Ares Management has $54 billion in capital under management and invests in private equity, leveraged loans, high-yield bonds, distressed debt and private debt. The firm has approximately 450 employees and is headquartered in Los Angeles, CA with offices in New York, London, Chicago, and Atlanta (www.aresmgmt.com).

© 2012 PEPD • Private Equity’s Leading News Magazine • 10-12-12