specialty retail

Promus Invests in Event Network

January 25, 2018 by John McNulty

Promus Equity Partners has made a minority equity investment in Event Network alongside the company’s management team.

Event Network is an operator of specialty retail locations at zoos, aquariums, science centers, children’s and cultural museums, gardens, iconic landmarks and historic sites. The company manages the entire retail experience of the store in concert with each venue’s unique theme and its services include custom product development, store design, merchandising and retail services. Event Network is headquartered in San Diego (www.eventnetwork.com).

Event Network was founded in 1998 and began with a store for the Titanic Artifact Exhibition in Boston. Larry Gilbert and Helen Sherman, co-founders of the company, led the effort to create a retail offering for Titanic (at the time, a fairly novel concept for museum exhibition retail).

“Event Network has clearly arrived at the right place, at the right time and with the right partners, and we look forward to an exciting future with our expanded Promus-Event Network family,” said Mr. Gilbert, co-founder and CEO of Event Network. “We appreciate that Promus is willing to invest over an extended period since we see so many opportunities for long-term growth.”

Promus Equity Partners is a private equity investment firm affiliated with Promus Holdings, a multi-family asset management firm. Promus targets lower middle market companies with EBITDA’s of $15 million or less. Sectors of interest include consumer products, food & beverage, industrial products, manufacturing services, specialty materials, distribution, and business services. The firm is based in Chicago (www.promusequity.com).

Piper Jaffray & Co. (www.piperjaffray.com) was the financial advisor to Event Network.

Monomoy Closes on Buy of West Marine

September 15, 2017 by John McNulty

Monomoy Capital Partners has completed its take private of West Marine, an omni-channel specialty retailer, for approximately $337 million. Monomoy acquired West Marine through its third fund, Monomoy Capital Partners III LP, which close in June 2016 with $767 million of capital.

West Marine (NASDAQ:WMAR) is the largest specialty retailer of boating supplies and accessories, with more than 249 stores located in 37 states and Puerto Rico. The company carries more than 175,000 aftermarket products, ranging from rope (its original product – see below), to the latest in marine electronics, technical apparel, footwear and accessories. In addition to its retail stores and Port Supply wholesale divisions, the company also sells through its mail order and an e-commerce divisions. The company, led by CEO Matt Hyde, has more than 4,000 employees and is headquartered south of San Jose in Watsonville, CA (www.westmarine.com).

In 2016 West Marine had total revenues of $702 million and an EBITDA of $37 million which equals a 9.1x purchase price multiple and .48x multiple of 2016 revenues.

Randy Repass, Chairman of the Board, founded the company in a garage in 1968 as a mail order seller of nylon rope under the name West Coast Ropes. The fledgling company opened its first store in Palo Alto in 1975 and began stocking other boating supplies such as anchors and fenders. In 1977, the company acquired some of the assets of Boston-based West Products, then a well-known mail-order business, and changed its name from West Coast Ropes to West Marine Products. In 1987, the company introduced its first master catalog— 330 black-and-white pages packed with boating gear. The company went public in 1993 and merged with one of its oldest competitors, E&B Marine, in 1996. In 2003 West Marine acquired the retail and catalog divisions of long-time competitor BoatUS.

“We are excited to welcome West Marine to the Monomoy portfolio,” said Daniel Collin, Monomoy’s Co-Chief Executive Officer. “We have long admired West Marine and the unique value the company provides for its loyal customers and world class associates. We look forward to working with the company’s management team to ensure that West Marine continues to lead the industry.”

Monomoy makes control investments of debt and equity in companies with at least $150 million in sales, $15 million of EBITDA, and enterprise values of up to $500 million. Sectors of interest include industrial, distribution, and consumer. The firm is headquartered in New York (www.mcpfunds.com).

Monomoy’s acquisition of West Marine marks the firm’s third middle market investment of 2017, following the February 2017 acquisitions of Asheboro, NC-based Klaussner Furniture Industries, a manufacturer and distributor of furniture and furniture components; and Friedrich Holdings, a San Antonio, TX-based manufacturer of air-conditioning products for consumers and commercial end users.

Bank of America and Pathlight Capital provided financing to back the buy of West Marine. Guggenheim Securities was the financial advisor to West Marine and Jefferies was the financial advisor to Monomoy. Kirkland & Ellis provided Monomoy with legal counsel and Grant Thornton provided financial and accounting diligence.

Monomoy to Buy West Marine

June 30, 2017 by John McNulty

West Marine, an omni-channel specialty retailer, has signed an agreement to be acquired by Monomoy Capital Partners for $12.97 per share in cash which represents a total equity value of $338 million.

West Marine (NASDAQ:WMAR) is the largest specialty retailer of boating supplies and accessories, with more than 260 stores located in 38 states and Puerto Rico. The company carries more than 100,000 products, ranging from rope (its original product – see below), to the latest in marine electronics, technical apparel, footwear and accessories. In addition to its retail stores and Port Supply wholesale divisions, the company also sells through its mail order and an e-commerce divisions. The company is led by CEO Matt Hyde and is headquartered south of San Jose in Watsonville, CA (www.westmarine.com).

In 2016 West Marine had total revenues of $702 million and an EBITDA of $37 million which equals a 9.1x purchase price multiple and .48x multiple of 2016 revenues.

Randy Repass, Chairman of the Board, founded the company in a garage in 1968 as a mail order seller of nylon rope under the name West Coast Ropes. The fledgling company opened its first store in Palo Alto in 1975 and began stocking other boating supplies such as anchors and fenders. In 1977, the company acquired some of the assets of Boston-based West Products, then a well-known mail-order business, and changed its name from West Coast Ropes to West Marine Products. In 1987, the company introduced its first master catalog— 330 black-and-white pages packed with boating gear. The company went public in 1993 and merged with one of its oldest competitors, E&B Marine, in 1996. In 2003 West Marine acquired the retail and catalog divisions of long-time competitor BoatUS.

Mr. Repass has entered into a voting agreement whereby he and his affiliated entities have agreed to vote shares representing approximately 20% of the company’s voting power in favor of the transaction.

“We are excited to welcome West Marine to the Monomoy portfolio,” said Daniel Collin, Co-Chief Executive Officer of Monomoy Capital Partners. “We have long admired West Marine and the unique value the company provides for its loyal customers and world class associates. We strongly support West Marine’s vision for the future, strategic initiatives, and culture. We are excited to invest in and work together with the company’s management team to continue to lead the industry.”

Guggenheim Securities was the financial advisor to West Marine and Jefferies was the financial advisor to Monomoy.

The transaction, which has been unanimously approved by West Marine’s Board of Directors, is expected to close in the third quarter of this year.

Topspin and Motivity Buy Palmetto Moon

November 9, 2016 by John McNulty

Topspin Partners and Motivity Capital Partners have acquired Palmetto Moon, a specialty retailer of men’s, women’s and children’s apparel.

Palmetto Moon operates eleven stores across South Carolina, Georgia and North Carolina and sells men’s, women’s and children’s apparel, accessories and footwear. The company was founded by Bob and Karen Webster and is headquartered in Charleston, SC (www.palmettomoononline.com).

With the closing of the transaction, Mr. and Mrs. Webster will be stepping back from their day-to-day roles within the company, but will continue to serve the company in advisory roles.

Under Topspin and Motivity ownership, the company’s management team will be led by CEO Eric Holzer, who took over the role in 2016 from Mr. Webster and has over 14 years of experience with Palmetto Moon, serving in nearly every area of the organization. “Palmetto Moon has become a strong regional player in the specialty retail market over the last 15 years, growing to eleven stores across South Carolina, Georgia and North Carolina. I am excited about partnering with Topspin to continue growing Palmetto Moon’s footprint,” said Mr. Holzer.

“We are very impressed with the business the Websters have built and the growth that the company has achieved to date, and we see great potential for continued expansion within the southeast and beyond,” said Steve Lebowitz, Managing Partner at Topspin. “We are excited to partner with Eric and the company’s management team to capitalize on that potential and accelerate the company’s growth.”

Topspin Partners makes control investments in profitable and established lower middle-market businesses. Sectors of interest include health and wellness, niche consumer, food and beverage, business services and security. The firm is based near New York in Roslyn Heights, NY (www.topspinpe.com).

Motivity Capital Partners invests in specialty retail companies that have revenues of $10 million to $250 million and EBITDA of at least $1.5 million. Retail sectors of specific interest include apparel & footwear; consumer products; medical practices (optical, dental and podiatry); consumer products; service companies; and incentive marketing. The firm is based near Dallas in Irving, TX (www.motivitycapital.com).

“We are excited to team up with Topspin and the management team at Palmetto Moon. The company’s dynamic merchandising concept led by their strong management team has produced outstanding results and we look forward to working with them to grow the business,” said Jack Gunion, a Partner at Motivity.

Brentwood Acquires Specialty Retailer from ICV

August 27, 2014 by John McNulty

Brentwood Associates has acquired Marshall Retail Group (MRG), an operator of specialty retail stores that are located in high-foot-traffic locations, from ICV Capital Partners which acquired the company in 2008.

“Marshall Retail Group has a portfolio of proven, highly differentiated concepts,” said Rahul Aggarwal, managing director at Brentwood. “Furthermore, the company has demonstrated the ability to successfully innovate and create new retail concepts to meet its customers’ needs.”

Marshall Retail Group is a specialty retailer that operates stores in high-foot-traffic marketplaces such as casino resorts and airports. The company’s stores operate in three categories: logo and sundry stores; fashion apparel, footwear and accessories stores; and third party licensed brands. The company operates 155 retail locations across 10 states and Washington DC. Marshall Retail Group was founded in 1955 and is headquartered in Las Vegas (www.marshallretailgroup.com).

ICV Capital Partners first invested in Marshall in 2003 when it acquired the company from the founding Marshall family and then sold the business to Bruckmann, Rosser, Sherrill & Co. (BRS) in 2005. ICV reacquired Marshall from BRS in 2008 during the economic downturn and uncertainty about the Las Vegas casino market.

“When presented with the opportunity to re-acquire MRG we were extremely comfortable backing Michael Wilkins as CEO and the same management team we knew well from our previous investment,” said Cory Mims, a Managing Director of ICV Partners. “During our ownership we worked with them as the company continued to penetrate the core casino market resulting in record year-over-year store growth. In addition, MRG diversified into the airport retail sector which generated significant additional growth.”

In 2011 ICV completed a dividend recapitalization of MRG and returned approximately 53% of capital invested. According to ICV, the sale of MRG will result in an attractive return for the firm and its limited partners.

ICV Partners invests in family-owned and closely-held businesses as well as corporate divestitures with revenues from $25 million to $250 million and EBITDAs from $5 million to $30 million. The firm has $850 million in capital under management. ICV Partners was founded in 1998 and has offices in New York and Atlanta (www.icvpartners.com).

Marshall Retail Group is led by Chief Executive Officer Michael Wilkins, who will continue to lead the business going forward. “Brentwood is an important strategic partner that truly understands our business. We are eager to call on their expertise in retail and consumer brands as we continue our expansion into new channels,” said Mr. Wilkins. “At Marshall Retail Group, we’ve always focused on supporting and developing our people, enabling us to provide a high-quality experience for our customers. As we celebrate our 60th anniversary this coming year, we are pleased to have found a partner that shares our passion for team building and supports our continued growth.”

Brentwood Associates is a consumer-focused private equity investment firm with over $850 million of capital under management. Sectors of interest include branded consumer products; consumer and business services; direct marketing, including direct mail and e-commerce; education; health and wellness; restaurants; and specialty retail. The firm was founded in 1972 and is based in Los Angeles (www.brentwood.com).

“Marshall Retail Group has assembled a truly best-in-class management team who have generated growth and created a corporate culture that ensures future success. We look forward to working closely with Michael Wilkins and his leadership team to build on their impressive track record,” said Steve Moore, partner at Brentwood Associates.

Golub Capital was the lead arranger on the debt financing supporting the acquisition (for more information see our article “Brentwood Selects Golub to Finance Buy of Marshall Retail Group”.

Marshall Retail Group was advised by North Point Advisors and Nomura Securities, and its legal counsel was Kirkland & Ellis. Brentwood was represented by Greenburg Traurig in conjunction with the transaction and Latham & Watkins on the debt financing.

Sun Capital Partners Acquires Gem Shopping Network

September 17, 2013 by John McNulty

Gem Shopping Network, a live television network specializing in the sale of colored gemstones, has been acquired by Sun Capital Partners.

Gem Shopping Network is a 24-hour live television network specializing in the sale of colored gemstones and one-of-a-kind jewelry. The company reaches over 40 million homes broadcast via satellite and cable networks across the United States. The company was founded in 1997 by Frank Circelli and is based in the Atlanta suburb of Duluth (www.gemshopping.com).

Livingstone acted as the exclusive financial advisor to Gem Shopping on this transaction. “Livingstone did an outstanding job understanding our business and conducting a competitive global sale process that exceeded our expectations,” said Gem Shopping Network founder Frank Circelli.

Livingstone is an independent, international investment banking firm focused on M&A and private capital transactions with values between $30 and $300 million. Across its principal offices in the US and Europe, Livingstone’s corporate finance professionals specialize in five key sectors: business services; consumer; healthcare; industrial; and media & technology. The firm has offices in Chicago, London and Madrid (www.livingstonepartners.com).

“We recognize what is important to our clients and how to navigate the complexities of founder transitions. This is another example of our ability to deliver great results for owner-operated businesses,” said Livingstone Vice President Andrew Bozzelli.

Sun Capital Partners is a private investment firm focused on leveraged buyouts, equity, debt, and other investments in companies that can benefit from its in-house operating professionals and experience. Sun Capital has invested in and managed more than 325 companies worldwide with combined sales in excess of $45 billion since the firm’s inception in 1995. The firm has offices in Boca Raton, Los Angeles, and New York as well as affiliates with offices in London, Paris, Frankfurt, Luxembourg, Shanghai and Shenzhen (www.SunCapPart.com).

“We are proud of the success the team has had establishing Gem Shopping as an industry leader. We are enthusiastic about partnering with Sun Capital and the opportunity ahead. Sun Capital will help us accelerate the execution of our growth strategy with capital and their deep retail and consumer products sector expertise,” said PJ Lynch, CEO of Gem Shopping Network.

Sycamore Partners Acquires Hot Topic

June 13, 2013 by

Sycamore Partners has completed its previously announced acquisition of Hot Topic, a specialty retailer, for $14 per share in cash or a total of approximately $600 million.

Hot Topic is a mall and web based specialty retailer operating the Hot Topic and Torrid concepts, as well as a new test retail concept, Blackheart. Hot Topic offers music/pop culture-licensed and music/pop culture-influenced apparel, accessories, music and gift items for young men and women. Torrid retails on-trend fashion apparel, lingerie and accessories inspired by and designed to fit the young woman who wears size 12 and up. Blackheart offers an expanded collection of dark and edgy lingerie, accessories and beauty products. The company operates 618 Hot Topic stores in all 50 states, Puerto Rico and Canada, 190 Torrid stores, 5 Blackheart stores, and Internet stores. Hot Topic is based in City of Industry, CA (www.hottopic.com) (www.torrid.com) and (www.blackheartlingerie.com).

“Hot Topic and Torrid are both leaders in their categories, and we are excited to have both brands as part of our portfolio,” said Stefan Kaluzny, Managing Director of Sycamore Partners. “Sycamore Partners is very pleased to have the opportunity to partner with Lisa Harper and her team to invest in the continued development of both the Hot Topic and Torrid retail brands.”

Sycamore Partners invests in consumer and retail companies. The firm has more than $1 billion of capital under management and is based in New York (www.sycamorepartners.com).

“We are very happy to partner with Sycamore Partners. Their knowledge and expertise in the consumer and retail markets is precisely what we need to optimize both the Hot Topic and Torrid brands,” said Lisa Harper, Chief Executive Officer and Chairman of the Board of Hot Topic.

Thomas H. Lee Acquires iParty

March 11, 2013 by

iParty Corp., a party goods retailer with a strong presence in New England, has entered into an agreement to be acquired by Party City, a portfolio company of Thomas H. Lee Partners. The transaction is expected to close during the second quarter of 2013.

iParty Corp. is a party goods retailer that operates 54 iParty retail stores in New England and Florida and an internet site for costume and related goods and party planning. The company is based in Dedham, MA (www.iparty.com).

“We are excited to add iParty’s strong platform of retail stores to our vertically integrated business model,” said Gerald Rittenberg, Party City’s Chief Executive Officer. “By joining forces, we enhance our leadership position and accelerate our growth throughout New England, a densely populated region where we currently do not have a market presence. We have maintained a relationship with iParty for many years and have long admired their strong management team and well-recognized brand. We look forward to working together to expand our combined geographic footprint and brand presence on a national scale.”

Party City designs, manufactures, contracts for manufacture and distributes party goods, including paper and plastic tableware, metallic balloons, accessories, novelties, gifts, stationery and Halloween costumes, and is North America’s No. 1 party retailer with more than 750 company-owned and franchise locations throughout the United States, Canada and Puerto Rico. The company is headquartered in Rockaway, NJ (www.partycity.com). Thomas H. Lee Partners acquired a majority stake in Party City in June 2012.

“Party City is a leading player in our industry and we could not be more pleased with this outcome of the strategic review we initiated last year and the return it affords to all of our stockholders, both Common and Preferred,” said Sal Perisano, iParty’s Chairman and Chief Executive Officer. “The Party City network with their Amscan distribution platform will benefit our stores and products by significantly increasing our scale and broadening our geographic presence. We look forward to working with Party City and its management team as we integrate our companies.”

Thomas H. Lee Partners, founded in 1974, is one of the oldest private equity investment firms in the United States. Industries of interest include business and information services; consumer products and retail; financial services; health care; industrial; and media & communications. Since its founding, Thomas H. Lee Partners has raised approximately $20 billion of equity capital and invested in more than 100 businesses with an aggregate purchase price of more than $150 billion. The firm is based in Boston (www.thl.com).

Raymond James & Associates acted as financial advisor to iParty on this transaction.

The Carlyle Group Acquires Tok&Stok

September 13, 2012 by John McNulty

The Carlyle Group has acquired 60% of Tok&Stok, Brazil’s largest specialty furniture retailer by sales, from founders Ghislaine and Régis Dubrule. Ghislaine Dubrule will remain as CEO of Tok&Stok following the transaction and the founders will retain a 40% stake in the company.

“With Carlyle’s support we expect to accelerate our growth in sales, strengthen our customer service and improve the relationships with our partners, including suppliers and employees, all of which are instrumental to deliver our mission of making good design accessible,” said Mrs. Dubrule.

Tok&Stok is specialty furniture retailer and sells a wide range of furniture and home décor products. In 2011, the company generated approximately R$1 billion in sales through 35 stores in 12 states across the country and employed approximately 3,300 people. The company was founded in 1978 and is based in Barueri (near São Paulo), Brazil (www.tokstok.com.br).

Equity capital for the transaction will come from the $1 billion pool of capital managed by Carlyle’s South America Buyout Fund and Fundo Brasil de Internacionalização de Empresas FIP, a local fund advised by Carlyle and Banco do Brasil. The transaction is expected to close in the fourth quarter of 2012.

“We are proud to partner with the Dubrule family, who has built a tremendous company over the course of 34 years with a solid growth track record and an outstanding management team. We look forward to supporting Tok&Stok in achieving its growth plans,” said Juan Carlos Felix, Managing Director with Carlyle’s South American Buyout team.

Carlyle established its South America Buyouts team in 2008. In Brazil, Carlyle has also invested in CVC, a tourism operator; Qualicorp, a health plan broker and administrator; Scalina, a lingerie manufacturer and retailer; Ri-Happy, a toy retailer; and Grupo Orguel, an equipment rental company.

The Carlyle Group invests in buyouts, growth capital, real estate and leveraged finance in Africa, Asia, Australia, Europe, North America and South America focusing on aerospace & defense, automotive & transportation, consumer & retail, energy & power, financial services, healthcare, industrial, infrastructure, technology & business services and telecommunications & media. The firm is based in Washington, DC (www.carlyle.com).

“Carlyle’s global resources and impressive local track record were key elements in our decision to have a partner. This is a major milestone for the company and for the family,” said Regis Dubrule.

Clayton, Dubilier & Rice Acquires David’s Bridal

August 30, 2012 by John McNulty

Clayton, Dubilier & Rice has signed an agreement to acquire David’s Bridal, a specialty retailer of bridal gowns and a portfolio company of Leonard Green & Partners which acquired the company in November 2006. Leonard Green will maintain a minority interest in the company. The transaction values the company at approximately $1.05 billion.

“The company’s strong brand awareness, exceptional service quality, deep product knowledge, and high performance levels are unmatched in the bridal customer segment and that is why we are so excited about the transaction,” said CD&R Partner Kenneth Giuriceo.

David’s Bridal designs, produces and sells bridal gown and wedding-related apparel and accessories through a network of over 300 US and 5 Canadian stores. It is the largest American bridal-store chain. The company is based in Conshohocken, PA (www.davidsbridal.com).

CD&R Operating Partner Paul Pressler, former CEO of the GAP and former senior Disney executive, will assume the role of Chairman at the close of the transaction, expected in the fourth quarter.

Bank of America Merrill Lynch, Barclays, Goldman Sachs Bank, and Morgan Stanley have committed to providing debt financing for the transaction.

“David’s Bridal is a unique and well-positioned specialty retailer competing in a large and stable industry,” said Richard Schnall, a Partner at CD&R. “We look forward to working closely with the company to build on its market leadership and scale advantages to grow in new market segments, channels, and geographies.”

Clayton, Dubilier & Rice focuses on producing financial returns through building stronger more profitable businesses. Since inception, the firm has managed the investment of more than $18 billion in 52 US and European businesses representing a broad range of industries with an aggregate transaction value of approximately $80 billion. Founded in 1978, Clayton, Dubilier & Rice is based in New York, NY and London, UK (www.cdr-inc.com).

“The CD&R team has a reputation for operational excellence and we welcome their ownership as we accelerate our growth strategies for the company and continue our commitment to providing the highest levels of style, quality and value to our customers,” said Robert Huth, President and CEO of David’s Bridal. “We are also pleased that Leonard Green will continue to be an investor.”