2014 Retrospective

Press Release

2014 has been a year of tremendous positive change here at Gordon Brothers Group.  While our transaction volume was strong—making this a standout year on that basis alone—2014 also saw a number of strategic and leadership developments, which will contribute to our performance for many years to come.  Below we’ve detailed some noteworthy transactions as well as key news highlights from the past year:

Firm-Wide Developments
Gordon Brothers Group

Leadership Enhancements
In the Autumn we announced that Michael Frieze would assume the role of Chief Investment Officer and remain Chairman of the Board of Directors while I was appointed Chief Executive Officer. This announcement was preceded by the appointment of Michael Muldowney as Chief Financial Officer in May of this year. Just this month, we also made two additions to our management team with the hiring of Ian Levine and Blair Nelson.  As Managing Director, Business Development, Ian is responsible for overseeing the Business Development and Marketing efforts firm-wide.  As Managing Director, Corporate Development, Blair is responsible for the development and execution of strategic initiatives across the firm. These new additions join the most tenured disposition, appraisal and real estate teams in the industry.  Together, our group works as a partnership to guide the firm’s future strategic growth.

Gordon Brothers Europe

Global Expansion
2014 saw significant international growth for the firm with the opening of two new Gordon Brothers Europe offices in Cologne, Germany and Milan, Italy—with Madrid, Spain and Bristol, UK coming early in the first quarter of 2015.  As part of this expansion, we also made several key international appointments including Siegfried Kobal, Director, Operations; Olaf Galler, Managing Director, Retail & Consumer Products D-A-CH (Deutschland, Austria & Switzerland); Dr. Andreas Kemper, Director, Retail & Consumer Products; Maria Samudovska, Investment Director and Scott Ronaldson, Investment Director, Italy.  We see significant potential to leverage our platform in other markets throughout the world and will continue that growth in Europe and elsewhere.

Gordon Brothers Finance Company

Gordon Brothers Finance Company
In the Autumn, Gordon Brothers Group completed a transaction with BlackRock Kelso Capital to launch Gordon Brothers Finance Company. As part of the transaction, the vast majority of loans managed by GB Credit Partners were transferred to Gordon Brothers Finance Company and the same team, led by Patrick Dalton, continues to originate, underwrite and manage loans to middle market companies in the U.S., Canada and Europe. Gordon Brothers Finance Company remains headquartered in Boston and maintains an exclusive partnership with Gordon Brothers Group to provide deep valuation expertise to support the execution of transactions where other lenders may not.

Gordon Brothers Group: Retail Division Transactions
Dots

Dots
Gordon Brothers Group’s Retail Division prevailed as the highest bidder in a court authorised auction by providing an aggressive equity guarantee for the closure of all Dots stores following the company’s Chapter 11 bankruptcy filing. Dots was a national discount retailer of women’s fashion apparel and accessories that faced competitive pressures, which ultimately forced its closure. Gordon Brothers Group invested additional capital to supplement the merchandise assortment to enhance the results of the disposition of the company’s existing $120 million of inventory.  We also disposed of the retailer’s furniture, fixtures and equipment.  Our retail team leveraged the company’s e-commerce channel and managed its email marketing and social media presence to optimise returns.

Coldwater Creek

Coldwater Creek
The Retail Division of Gordon Brothers Group, as part of a joint venture project, provided an equity guarantee for the closure of all 366 Coldwater Creek stores following the company’s bankruptcy filing this spring.  The joint venture managed all aspects of the sale, including operating the company’s social media channels, website and customer database to optimize the going-out-of business sales.  Additionally, Gordon Brothers Group collaborated with the company’s management team to select and purchase additional merchandise to augment the inventory assortment throughout the sale, enhancing the results of the project. DJM Real Estate, the real estate affiliate of Gordon Brothers Group, coordinated the extension of over 90% of existing store leases to maximize the results of the sale.

 

Gordon Brothers Group: Brand Division Transactions
Coby Electronics

Coby Electronics
Since Gordon Brothers Group’s acquisition of Coby Electronics, including its intellectual property assets, in 2013, the Brand Division has continually worked towards rebuilding the brand as a value offering to discerning consumers. Earlier this year, Gordon Brothers Group entered into a license agreement for core products in North America and the brand’s re-launch is underway.  COBY® branded consumer electronics products can be found on many retailers’ shelves today and a line of new upcoming products will be exhibited at the CES show in January.  Several licenses are in the process of being negotiated for expansion of the brand internationally.

Woolrich

Woolrich
The Valuation & Advisory Services Division provided a comprehensive appraisal of the trade name and inventory of this 180 year-old manufacturer, distributor and retailer of quality outdoor clothing. The valuation considered wholesale, retail, internet and licensing channels and applied to the Woolrich Original, Woolrich White Collection, Woolrich John Rich & Bros., and Woolrich Woolen Mills brands. The analysis followed a discounted cash flow approach and included a broad competitive assessment of the market as well as an evaluation of an extensive licensing relationship in the European and Asian markets.

DJM Real Estate Transactions
Big Lots

Big Lots
DJM Real Estate, along with its partner CBRE Canada, successfully terminated 80 Big Lots leases in Canada as part of the company’s strategic exit of the country. Headquartered in Columbus, Ohio, Big Lots is the nation's largest broadline closeout retailer, operating more than 1,400 retail stores across 48 states throughout the U.S.  Over the course of the six month timeframe, DJM Real Estate greatly exceeded the retailer’s cost projections for exiting the Canadian market, better positioning the company to focus on its ongoing operations in its priority markets.