Vestis Retail Group, LLC (Vestis), which is owned by funds advised by Versa Capital Management, LLC (Versa) and comprises Bob's Stores (Bob's) and Eastern Mountain Sports (EMS), announced June 30 that it has signed a definitive agreement to acquire Sport Chalet, Inc., a premier, full-service specialty sporting goods retailer with 50 stores in the Western United States. Under the terms of the agreement, an affiliate of Vestis will commence a cash tender offer for all of the outstanding Class A and Class B shares of Sport Chalet for $1.20 per share.
The combination of Sport Chalet with Vestis's East Coast-based retailers Bob's and EMS will create one of the largest sporting goods retailers in the U.S., with more than 150 stores and $800 million in total sales for the 12 months ended Dec. 31, 2013. The new Vestis, through its three distinct brands, will have a national footprint and offer an impressive assortment of branded technical, performance and lifestyle merchandise, and customer and specialty services combined with a unique and scalable online presence.
Craig Levra, Chairman of the Board, CEO and President of Sport Chalet, will remain in his position as CEO at Sport Chalet and continue to run this business out of Los Angeles, reporting to Vestis CEO Mark Walsh. Vestis's corporate headquarters will remain in Meriden, Conn. Vestis does not anticipate any Sport Chalet store closings as a result of this transaction. Sport Chalet, as is the case with Bob's and EMS, will continue to operate under its existing brand name.
"For the past year we have methodically explored a wide range of options to position Sport Chalet for growth and to further our strategic initiatives," Levra said in a news release. "We believe Vestis is the ideal partner given its base of stores in the Eastern U.S. and synergistic vendor relationships, marketing focus and inventory platforms. We believe we will be very well positioned to compete in today's retail environment as part of a larger organization with significant scale advantages and broad geographic reach.
"We are working creatively as we tighten controls for performance at the bottom line. We are ready for the next step, and we look forward to working with a company like Vestis that understands our customers, our market and our vendors, and has the financial resources to help us grow the business."
Walsh added: "We are very excited to add Sport Chalet to the Vestis portfolio – Sport Chalet greatly strengthens our position in the active lifestyle and outdoor categories, provides scale from which to grow, and diversifies our geographic footprint. Sport Chalet is in the midst of a transformation that is making technology and customer service central to its operations. It has made significant strides recently, as evidenced by its market leading position in California, its Action Pass customer loyalty program and its strong mobile sales platform. 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 companies to the benefit of customers and vendors alike."
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 Vestis company to continue to deliver great products and service to their customers."
Click here to read the complete news release.