Summer sale

In the British press, the summer months are traditionally referred to as the “silly season”, with the media using parliament’s break as an excuse to turn out bizarre stories and all manner of questionable statistics. Not so silly, however, is the activity taking place in the multichannel retail sector if the recent rush of acquisitions is to go by.

First was the news, in July, that BrightMinds, an educational toys and games cataloguer, bought children’s furniture catalogue The Sleepover Company for an undisclosed sum. BrightMinds’ managing director Alison Quill says that the acquired brand will be run as a separate business, keeping its catalogue and website. There were no redundancies involved with the sale.

Spirit of Nature, a cataloguer/etailer of eco nappies and other environmentally friendly household goods, was acquired in June and reopened its website July. It was bought by Milborne Group, which specialises in the acquisition and management of financially distressed online retail businesses. Milborne Group is operated by Adam Smith, the founder of Adili (now Ascension) and business partner James Akin-Smith, founder of BeCheeky.

At its height, Spirit of Nature had a turnover of £1.5 million and Adam Smith says he aims to nurture the business back to health. His first priorities are to get the business restocked, introduce new products and make improvements to the efficiency of the fulfilment and customer services departments. He is also planning to reintroduce a gifts catalogue in time for Christmas.

One of the reasons Spirit of Nature was in difficulty, says Smith, is because the product range didn’t grow with its customers’ needs—“plenty of nappies but nothing for the mums or older children”. Smith says he will move the business’s positioning and focus more on “effectively servicing ethical mums”—everything from nappies, to skincare, to clothing.

Everything must go
Buying businesses in financial difficulty was a trend of the summer. On 29th July, workwear and uniforms cataloguer/distributor Alexandra appointed PricewaterhouseCoopers as administrator after abandoning talks to raise funds through the sale of equity. Just a month previously, Catalogue e-business had reported on Alexandra’s restructuring efforts. By 6th August, Alexandra’s assets and Dimensions Clothing, another workwear supplier, were acquired by US-based menswear retailer Men’s Wearhouse for approximately £61 million. The combined businesses, said a statement from Men’s Wearhouse, will be organised into a holding company of which Men’s Wearhouse will control 86 percent and the existing shareholders of Dimensions will hold the remaining 14 percent.

On 12th August, Findel announced it had sold lossmaking Confetti, a multichannel retailer of wedding products, and gifts and gadgets etailer I Want One of Those to Metro Holdings, a subsidiary of The Hut Group. The Hut Group, which operates Zavvi and Washbag.com as well as white-label sites for Debenhams and Woolworths, paid £600,000 for the two brands. Just a day after the acquisition was made public, The Hut placed Confetti into administration, closing its five retail stores and making 48 of Confetti’s 96 employees redundant. I Want One of Those, on the other hand, blogged about “moving to a shiny new warehouse” and “continuing to launch gazillions of awesome new products”.

At press time, the latest deal to be finalised was Flying Brands’ acquisition of Garden Centre Online, an etailer of gardening hardware products, for £130,000. For the 12 months to August 2009, Garden Centre Online made a pretax loss of £110,000 on turnover of £1.25 million. It is anticipated that in the year to to 31st August 2010, sales will be similar to the previous year with a small pretax loss.

Flying Brands also recently bought London florist Drake Algar for £500,000. In addition, it has confirmed that an agreement has been reached to dispose of its “noncore” collectibles business Benham in order to free up resources to invest in its main gardening and gifts divisions. Flying Brands says it has entered into heads of agreement in respect of the sale, and expects it to complete in September.