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Burlington Firm May Bid for Ibex



Valley News Staff Writer
Tuesday, December 12, 2017

White River Junction— The former head of the Vermont Teddy Bear Co. and a Burlington private equity firm said they hope to make a bid for the assets of Ibex Outdoor Clothing Co. to keep the company and its jobs in Vermont.

Liz Robert, former chief executive of Vermont Teddy Bear, and Vermont Works, a private equity firm that makes “social impact” investments, said they are working with investors to submit a proposal to buy Ibex’s assets in order to prevent the struggling White River Junction maker of outdoor apparel from being sold to an out-of-state or overseas buyer and the jobs disappearing from the state.

Ibex, squeezed by changes in the retail market and burdened by debt, announced earlier this month it was liquidating and selling off the intellectual property to its brands and customer database. The principal owner of Ibex, North Castle Partners, has hired Hilco Streambank, of Needham, Mass., to manage the auction. Bids on Ibex’s assets are due on Dec. 27 in time for a final closing on Jan. 15.

Robert is currently owner and chief executive of Terry Bicycles, a Burlington designer, manufacturer and marketer of women’s cycling apparel and accessories. She was chief executive and chief financial officer of Vermont Teddy Bear until the company was sold in 2005.

“When I heard the company was imploding and the IP was up for sale, and I further understood there were folks from out of state that are interested in taking it over, I reached out to Vermont Works and other potential partners who could help put together a consortium to obtain financing and acquire the IP,” Robert said in an interview on Friday. “In doing that I would obviously leverage the operations and infrastructure I have with Terry Bicycles with the ongoing operations of Ibex.”

Ibex is currently operating with about 20 employees in White River Junction and another 20 to 30 workers at its three company-owned retail stores in Boston, Denver and Seattle. The company has said it expected to wind-down operations by February.

Vermont Works describes itself as a “private equity impact fund” that targets investments among entrepreneurs in Vermont who combine business objectives with a positive social mission. The firm, co-founded about a year ago by asset managers Bob Zulkoski and Frank Koster and of which Robert is also a director, has to date made about half a dozen investments, including coding school Burlington Code Academy, furniture maker Vermont Farm Table and Packetized Energy, which helps energy users balance their supply demands with the electrical grid.

“We’re heartbroken by yet another iconic Vermont company being sold outside the state or even outside the country,” Zulkoski said in an interview on Monday. “We think Liz is the right person to relaunch (the Ibex) brand successfully and rebuild the jobs here in Vermont.”

But keeping Ibex operating and in Vermont could be a high hurdle. One potential bidder for Ibex, according to Roberts and Zulkoski, could be VF Corp., the giant North Carolina-based apparel conglomerate that owns North Face, Timberland, Lee, Wrangler, Dickies and Nautica, among others.

Robert and Zulkoski said they worry an out-of-state buyer of Ibex would not have a commitment to keep the company and jobs in Vermont.

Craig Hodges, a spokesman for VF Corp., said via email that VF “doesn’t comment on rumors or speculation.”

Ted Manning, chief executive of Ibex, declined to comment, saying that parties are barred from discussing the sales process because of a nondisclosure agreement. DJ Jenson, operating executive at Connecticut-based North Castle Partners, declined to comment about potential bidders and the sale process.

Despite the problems that led to Ibex’s decision to liquidate, the apparel company’s sales have steadily been ticking upward in recent years, driven largely by “direct channel” online sales, according to a preview of the company’s revenue trends posted on Hilco Streambank’s website.

Ibex’s sales increased to $21 million in 2016 from $19.79 million in 2014, according to Hilco Streambank, and are projected to grow to about $38 million in 2021. Nearly half the sales in 2016, about $10 million, came from online and catalog sales, while about 31 percent, or $6.5 million, came from wholesale sales to independent retail stores. The remainder came from Ibex’s three company-owned retail sales and “international & other,” according to Hilco Streambank.

Before Ibex announced it would be winding down, the company previously announced that it did not intend to continue shipping apparel to independent retail stores and would instead focus on its online business and company-owned retail outlets.

Hilco Streambank also noted that Ibex.com is visited more than “2 million times annually” and that Ibex customers spend about $570 annually on Ibex apparel and the average purchase order is $172. The company has about 95,000 online customers and its catalog is distributed to 125,000 addresses.

“Ibex is a growing and scalable business with a strong, differentiated product offering in the outdoor, performance and premium apparel segments,” according to Hilco Streambank. “Its veteran leadership team has established the foundational infrastructure necessary for the business to scale.”

David Peress, executive vice president of Hilco Streambank, did not respond to an email for comment.

Robert said that Terry Bicycles and Ibex would make a good fit — she noted that Terry has been selling Ibex apparel through Terry’s own website and catalog and that 72 percent of Ibex’s customer base are cyclists.

“Not only is there operationally overlap, but there is a neat synergy in the customer base,” Robert said.

Robert also said she is aware that the owners of Ibex have a “fiduciary responsibility” to complete a sale that would satisfy the company’s financial obligations, which would favor an expeditious transaction.

Given the short time frame and holiday crunch between when Ibex announced it was seeking a buyer for its assets and the deadline date for bids — less than four weeks and between the Christmas and New Year’s holidays — “it almost seems to us they have a pre-determined buyer,” Robert said.

“We’re just hopeful it’s fair and there is an opportunity to us to keep the company in Vermont,” she said.

John Lippman can be reached at jlippman@vnews.com.