Golden Boy Oct 1, 2007 12:00 PM
, By Mark Del Franco
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Beverly, MA is an unlikely setting for the center of the catalog industry. Thirty miles northeast of Boston, it's a sleepy town with old New England houses and country roads. But Beverly is home to Orchard Brands, a $1.1 billion holding company, and to Appleseed's, a women's apparel catalog, and that's why I'm here on this September morning. I'm about to interview T. Neale Attenborough, the chairman/CEO of Orchard Brands, who in two years has overseen a massive acquisition program.
How big? I've never seen anything like it in this industry, says Craig Battle, managing director at investment bank Tucker Alexander. It started with Appleseed's purchase of The Tog Shop in August 2005. Then Appleseed's itself was acquired a month later by private equity firm Golden Gate Capital, which bought fellow women's apparel mailer Draper's & Damon's on the same day. Then there were buyouts of Haband, Blair Corp., and Norm Thompson Outfitters. Norm Thompson included home and garden title Solutions and apparel and accessories mailer Sahalie.
And last month, it acquired Gold Violin, a catalog of gifts and products for healthy living. What do they all have in common? That they serve mature consumers.
Golden Gate created Orchard Brands (formerly Appleseed's Topco) as a portfolio company. But Orchard Brands is only part of the Golden Gate network. Also included are Spiegel Brands, the umbrella for general merchant Spiegel and fashion apparel books Newport News, A.B. Lambdin, and Carabella, and Venus, a standalone swimwear catalog.
Golden Gate is so hungry for deals, in fact, it's even making them with itself Orchard Brands purchased Wintersilks from Venus on the same day that it bought Gold Violin.
So who is Neale Attenborough and how did he come to run this catalog empire?
On this morning Attenborough arrives at work a few minutes past 8 a.m. From the lobby, I spy him briefly chatting with the gardener tending to the flowerbeds before he enters the building.
A tall, professorial type, Attenborough exudes charm even while being a reluctant interview subject. And that may be one of his strengths. He's a calming influence and that's why he's a skilled executive he puts people at ease, says Battle.
He certainly looks relaxed for someone with his travel schedule. The firm has facilities everywhere from Erie, PA, to Portland, OR, and Attenborough visits all of them.
The first question is an easy one: How did a Harvard MBA with experience at Procter & Gamble get into the business?
As Attenborough tells it, he started his catalog career in 2001. He had been running Westways Ventures, a venture partnership focused on the consumer and health care sectors for private equity player Halpern Denny.
But Halpern Denny had just joined with Housatonic Partners to acquire Appleseed's from the Swiss giant Jemoli. And it asked Attenborough to run it.
He was a good choice. The catalog had tried, unsuccessfully, to offer trendy merchandise to a younger audience, but it was now back to focusing on mature women. And Attenborough saw the strength of the market.
It became clear to me that this is a distinct customer base, Attenborough says. We have a great reason for being.
What Attenborough didn't know then was that another private equity player also shared that view.
In the middle of that sale process for Draper's and Damon's, our guys at Halpern Denny said there's another guy out there who has the same kind of vision, so they put the business for sale, Attenborough says.
That turned out to be Stefan Kaluzny, the managing director of Golden Gate. Golden Gate acquired Appleseed's and Draper's and Damon's, and set up Orchard Brands to purchase even more companies.
The goal? To have someone say 20 years from now, Wow, that was a great company, Attenborough says.
They're well on the way.
The courting stage
Though it isn't the largest private equity group to buy catalog titles, Golden Gate is becoming perhaps the most well-known. And Attenborough's temperment has help facilitate the deal-making process.
How? Private equity money can provide a cataloger with stability and money to get to the next level. But the owner gives something up in exchange for those things: control of the business. And this can cause tension.
