Vestis Retail Group, which is backed by Versa Capital Management, has completed its buy of Sports Chalet. The sale price is reportedly $17 million. Versa said it made a “substantial” equity investment in Vestis and has received $180 million in financing. Founded in 1959, Sport Chalet is a specialty sporting goods retailer operating 50 stores in Arizona, California, Nevada and Utah. Cappello Global/Niagara International Capital provided financial advice to Sport Chalet, while Duff & Phelps provided a fairness opinion.
MERIDEN, Conn., August 19, 2014 – Vestis Retail Group, LLC (Vestis), owned by funds advised by Versa Capital Management, LLC (Versa) and operating Bob’s Stores (Bob’s) and Eastern Mountain Sports (EMS), announced completion of its previously announced acquisition of Sport Chalet, Inc., a premier, full-service specialty sporting goods retailer with 50 stores in the Western United States.
An affiliate of Vestis acquired all of the outstanding shares of Sport Chalet. Sport Chalet, which formerly traded on NASDAQ, is now privately held. As part of the acquisition, Versa made a substantial equity investment in Vestis and has received financing in the form of a $180 million revolving line of credit with ample undrawn availability to fund ongoing working capital needs.
The combination of Sport Chalet with Vestis’s East Coast-based retailers Bob’s and EMS creates one of the country’s largest outdoor-focused retail groups, with more than 150 stores and $800 million in annual sales. The new Vestis, through its three distinct brands and a national footprint, offers an impressive assortment of branded technical, performance and lifestyle merchandise, and customer and specialty services combined with a unique and scalable online presence.
“We are very excited to add Sport Chalet to the Vestis portfolio. Sport Chalet strengthens our position in the active lifestyle and outdoor categories, provides scale from which to grow, and diversifies our geographic footprint,” stated Mark Walsh, Vestis CEO. “We believe that Sport Chalet will benefit greatly from its addition to Vestis. With the talent and resources that already exist within the Vestis family, we envision a multitude of programs that will leverage the knowledge, talent, and relationships of our three retail brands to the benefit of customers and vendors alike.”
Craig L. Levra will remain in his position as CEO at Sport Chalet and continue to run that business out of the present Los Angeles-area office, reporting to Vestis CEO Mark Walsh. Vestis’s corporate headquarters will remain in Meriden, CT. Vestis does not anticipate any Sport Chalet store closings as a result of this transaction. Sport Chalet, Bob’s and EMS will each continue to operate under their respective brands.
Mr. Levra said, “We look forward to working with our new colleagues at Vestis, a company that understands our customers, our market and our vendors, and has the financial resources to help us grow the business.”
Gregory L. Segall, Chairman of Vestis and CEO of Versa Capital Management, stated, “We are pleased to broaden the geographic scale and technological capabilities of Vestis with the addition of Sport Chalet. We believe the combination of Vestis’s well-recognized brands will generate significant operational enhancements and enable each brand to continue to deliver great products and service to its customers.”
Cappello Global, LLC/Niagara International Capital Limited acted as Sport Chalet’s financial advisor, and Duff & Phelps, LLC provided a fairness opinion to Sport Chalet’s board of directors. Sheppard, Mullin, Richter & Hampton LLP served as Sport Chalet’s legal advisor. Sullivan & Cromwell LLP served as Vestis’s legal advisor.
About Vestis Retail Group
Based in Connecticut, Vestis Retail Group, formed by Versa Capital Management, operates Bob’s Stores, Eastern Mountain Sports and Sport Chalet. Bob’s is a 60-year-old, award-winning Northeastern retailer of value-oriented footwear, apparel and work wear. EMS is the second largest U.S. multi-channel retailer of human-powered outdoor sports apparel and equipment with stores in the Northeastern and Mid-Atlantic states. Founded in 1959, Sport Chalet is a premier, full service specialty sporting goods retailer operating stores in Arizona, California, Nevada and Utah and featuring the industry’s top sports brands in apparel, footwear, and sports equipment. More information is available at www.bobstores.com, www.ems.com and www.sportchalet.com.
About Versa Capital Management, LLC
Based in Philadelphia, PA, Versa Capital Management is a private equity investment firm with more than $1.4 billion of assets under management focused on control investments in special situations involving middle market companies where value and performance growth can be achieved through enhanced operational and financial management. Versa’s portfolio includes retailers Avenue Stores, Sport Chalet, EMS and Bob’s Stores; restaurants such as Black Angus Steakhouses; community newspapers under Civitas Media; and manufacturers that service a variety of industries. More information can be found at www.versa.com.
Forward Looking Statements
Certain statements made herein, including, for example, the potential benefits of the acquisition of Sport Chalet, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements reflect the current analysis of existing information and are subject to various risks and uncertainties. As a result, caution must be exercised in relying on forward-looking statements. Due to known and unknown risks, our actual results may differ materially from our expectations or projections.