As The Deal's John Blakeley
reported early Monday, a four-partner joint venture won the auction for bankrupt Sharper Image Corp., bidding $49 million for the specialty retailer's assets and intellectual property. While it's not unusual for firms to partner to buy assets out of bankruptcy, what is surprising is the way that the JV plans to manage Sharper Image's assets going forward.
The JV includes the PE-firms Hilco Consumer Capital and WindSong Brands, IP management specialist GB Brands and middle-market investor Crystal Capital. Hilco and GB are affiliates of Hilco Merchant Resources and Gordon Brothers Retail Partners, which in March began liquidating 96 of Sharper Image's 184 stores. This is typically where the liquidation story ends. Sell the assets, case closed. But in this deal, liquidation is only a piece of the strategy. To capitalize on the still valuable Shaper Image brand, the JV has developed a global licensing strategy for wholesale, retail, direct-to-retail, e-commerce and catalog businesses.
Sharper Image had hoped to reorganize its business, but was forced to move forward with a sale by a weak U.S. economy, disappointing sales and its inability to restock its stores with new merchandise. And with many businesses facing the same challenges, it's possible we could see similar dual-management strategies for distressed assets in the future.
- Suzanne Stevens
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Juergen Lasowski
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