NEW YORK — In an expansion of its direct-market universe, Alloy Inc. snatched up Old Glory Boutique Distribution Inc. Monday for $9.6 million in cash.
"Old Glory is a recognized direct marketer of music and entertainment lifestyle merchandise, vibrant product categories with great appeal to our Generation Y audience," said Alloy’s chairman and chief executive Matt Diamond, in a statement issued Tuesday. Those merchandise categories include apparel, accessories and collectibles.
By spring, Alloy will have completed the integration of Old Glory’s catalog and Internet operations with its own direct marketing infrastructure and add the firm’s 300,000-plus names to its already 12.5 million-name database. "Additionally, we plan to leverage Old Glory’s strong distribution brand to further drive sponsorship revenues, particularly enhancing our marketing programs for music and entertainment clients," said Diamond.
The business was purchased from Glenn Morelli, its sole proprietor, who will remain with Old Glory’s three-unit retail segment, which was not part of the deal.
The acquisition is expected to increase Alloy’s merchandise revenues by $8 million to $10 million next year and boost earnings before interest, taxes, depreciation and amortization by at least $1 million, Alloy said.
Sam Gradess, chief financial officer, noted about 60 percent of the additional sales from Old Glory will come from apparel.
This broadly matches Alloy’s overall sales mix which is 60 to 70 percent apparel and footwear.
For the nine months ended Oct. 31, Alloy’s net profits attributable to common shareholders mounted $13.6 million, or 34 cents a diluted share, reversing year-ago losses of $26.3 million, or $1.15. Total revenues for the period shot up 92.9 percent to $195.6 million from $101.4 million.
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