Saunders Karp & Megrue buys majority stake in Bob's
Clint Engel -- Furniture Today, February 1, 2005
MANCHESTER, Conn. -- A Connecticut-based equity firm has purchased a majority stake in Bob’s Discount Furniture here, infusing the company with the capital and expertise it needs to grow beyond New England.
Private equity firm Saunders Karp & Megrue of Stamford, Conn., acquired a 70% stake in the 19-store Top 100 chain for an undisclosed amount. Bob’s management has not changed and retains a stake in the company, although as part of the deal, Dick Lesser has joined Bob’s board on behalf of Saunders Karp.
“I’ve never been more excited about the future of the company,” said Bob Kaufman, president and namesake of the retailer, which did more than $250 million in sales this past year.
Kaufman noted Lesser was instrumental in the success of T.J. Maxx and its parent TJX Cos. — where he’s also a board member — and other multi-store retailers. Saunders Karp has a stake in more than 7,000 retail locations and has a history of taking private companies public.
“One of the things they will do is get us beyond our core New England penetration,” Kaufman said. He would not identify where exactly outside of New England the company plans to open new stores, but said Bob’s is expanding its Connecticut distribution center and has the ability to serve markets within a 250-mile radius, including New York and Long Island — it often gets calls from consumers asking Bob’s to open stores there.
Kaufman said the company will open two to four stores this year, with the next to open in Natick, Mass., in April. That number hasn’t changed as a result of the acquisition, but the “geographical targets have opened up.”
Bob’s was founded in 1991 by Kaufman and company Chairman Gene Rosenberg, who were later joined by CEO Stan Adelstein and Joe Goodman, executive vice president of finance and operations. The retailer quickly climbed the ranks of Furniture/Today’s Top 100 to No. 34 last year with 2003 sales of $205 million.
Saunders Karp said in a press release that it manages more than $1.5 billion through three private equity funds, and that Bob’s “represents SKM’s 17th platform investment in the retail industry.” Its other investments include Dollar Tree, The Children’s Place, Charlotte Russe Holding and Hibbett Sporting Goods.
“We are delighted with our newly formed partnership with Bob’s Discount Furniture,” said SKM partner John Megrue. “Gene, Bob, Stan and Joe have built a differentiated retail concept and a great management team. Bob’s has demonstrated a consistent record of impressive growth and financial performance. We look forward to working with the company to continue their rapid expansion.”
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Firm buys 70% stake in Bob's
Feb 20, 2005
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