Versa buys EMS
Philadelphia-based Versa Capital Management L.L.C., a turnaround firm that tries to squeeze value from troubled companies, is the latest owner of Eastern Mountain Sports (EMS), which sells outdoor recreation gear from mall stores in 12 states.
Versa won't say what it paid. EMS, based in Peterborough, N.H., operates 69 stores, down from 85 in 2007, when the privately owned chain reported yearly sales around $200 million. Expansion plans didn't survive the recession.
Profitable retailers have sold for roughly the value of a year's revenues, but "it's a brutal environment for these mid-sized" chains, and Versa's focus on distressed companies suggests it paid less, says Philadelphia investment banker Andrew Greenberg, co-owner of GF Data Resources, which tracks private-company sales.
Buyer Versa, a $1.2 billion-asset firm whose backers include real estate mogul/ Penn State patron/ Valley Forge Casino boss Ira Lubert and whose clients include Pennsylvania state pension funds, said one of its principals, Mark Walsh, will serve as EMS' chairman. Walsh also chairs the Bob's Stores clothing chain, another Versa property. In a statement, Versa boss Gregory L. Segall called EMS "a natural fit" for Bob's. Walsh said the chains will collaborate.
EMS chief executive Will Manzer, who led a buyout of the chain from American Retail Group of Atlanta in 2004, will keep his job title, for now. Previous EMS owners included movie studio Warner Communications Inc., and the Franklin Mint, the collectibles marketer. Philadelphia law firm Dechert L.L.P. advised Versa.
EMS "has passionate store associates, a rarity in retail," and was among the first to offer store pickup for online purchases, says Fiona Dias, chief strategy officer at ShopRunner, a Conshohocken-based online shopping co-op that includes EMS. She said Versa's investment could boost online sales beyond EMS's Northeast store network.
Philadelphia-based venture capital firm First Round Capital, which manages scores of six- and seven-figure investments in small tech-oriented firms, turned to its network of social-media fans, partners and wannabes to promote Cyber Monday discounts at retailers it backs.
"Take advantage of today - before it's too late," First Round cofounder Josh Kopelman urged followers.
"More than two dozen of their investments are listing holiday deals," wrote Tricia Duryee at AllThingsD.com. "Companies participating include One Kings Lane, Dog Vacay and Hotel Tonight. The offers range from free shipping to $50 or 15 percent off."
Since Kopelman "has 43,428 Twitter followers, he can personally move the needle on shopping on these sites with the tweet that he sent out," noted ShopRunner's Fiona Dias.
Did sales rise? "For us, success, really, is driving awareness," Kopelman told me.
Contact Joseph N. DiStefano at 215-854-5194, JoeD@phillynews.com or @PhillyJoeD on Twitter.