NEW YORK — Anchor Blue has found a safe harbor.
This story first appeared in the January 12, 2004 issue of WWD. Subscribe Today.
The Ontario, Calif.-based, youth-oriented specialty chain, previously known as Millers Outpost, has been acquired by an affiliate of Sun Capital Partners, the leveraged buyout firm located in Boca Raton, Fla., from American Retail Group Inc., the U.S. arm of the Brenninkmeyer family’s worldwide retailing empire.
Michael Bush has been named president, succeeding Howard Gross, who has left the firm. Bush is the former executive vice president and chief operating officer of Movado Inc., who most recently served as president and chief executive officer of Bally’s U.S. division. Earlier in his career, he was with Bain & Co., and served as senior vice president of strategic planning and marketing for Ross Stores, of which he is currently a director.
Terms of the acquisition weren’t disclosed, although financial sources had expected the company, whose stores are concentrated in Southern California and on the West Coast, to sell for about $400 million.
Steven Liff, a principal in Sun Capital’s Los Angeles office, confirmed that SCP had acquired all of the assets of the company but, citing a confidentiality agreement with the seller, declined to discuss terms of the deal.
“We had a good working relationship with ARG during the transaction and that’s continued since,” he said in a phone interview.
The Brenninkmeyers’ secretiveness is the stuff of legend and, accordingly, officials at ARG didn’t respond to requests for comment.
At least until the expiration of the confidentiality agreement that accompanied the acquisition, new management is sticking with this policy. Bush declined to provide sales figures, although market sources have estimated that Anchor Blue accounts for a bit more than one-third of ARG’s estimated $900 million in annual sales. Including 42 Millers Outpost stores, there are currently 213 units in operation. According to the Anchor Blue Web site, its units are situated in a total of 15 states, 11 of those in the West and the rest in the upper Midwest.
The acquisition also includes Levi’s by M.O.S.T., which holds the license to operate Levi’s and Dockers outlet stores west of the Mississippi River. There are nearly 50 such stores in operation.
Bush confirmed that more than 100 of Anchor Blue’s stores are in California, the state from which he and his wife both hail. “That helped to make this situation more attractive to us,” he said.
Bush noted that the conversion of stores to the Anchor Blue nameplate from the previous moniker, Millers Outpost, “is quite far along, but not yet complete. The more I get to know about the company, the more I like it, and the more I think it’s a good asset and a smart investment.”
He confirmed that the Anchor Blue private label accounts for about 75 percent of the assortment in a typical Anchor Blue store.
The company, originally known as Hub Distributing, was founded in 1972 by Dave Miller, a charismatic former photojournalist who hopped on the jeans-and-tops bandwagon not long after real estate mogul Donald Fisher conceived Gap and numerous other jeans chains came into existence.