Sheridan management brings company home
November 20, 2000-- Home Textiles Today,
GREENWICH, CT -Once again the ownership of Sheridan, the Australian-based bedding and textile company, has changed, this time moving back to its homeland through a management buyout.
Last week Sheridan Australia management, along with Castle Harlan Australian Mezzanine Partners Pty Ltd. (CHAMP), purchased the worldwide business and assets of Sheridan Australia in transactions valued at approximately $135 million from C.S. Brooks, based here. C.S. Brooks has owned the company since 1996.
C.S. Brooks is owned by Brook Johnson, chairman and ceo, who said, "The sale of the Sheridan business will allow our company to concentrate on continuing our Canadian and Donna Karan home fashions businesses and allow us the opportunity to explore other acquisitions and expansions in the future."
He acquired the Sheridan business through its purchase of Textiles Industries Australia, which included its subsidiary, Textiles Industries USA. He immediately changed the name to Sheridan Australia and Sheridan USA, reflecting the importance of the brand name.
The Sheridan sale includes the Actil and Carrington brands of bed and bath, which were brought to the U.S. through the Brooks acquisition.
Myron Mann, ceo of Sheridan Australia, based in Adelaide, Australia, emphasized that his company's game plan is "to market and sell via our global organization using our design and production skills." The Sheridan brand, with its signature design and colors, "is one of only three global home brands including Yves Delorme and Ralph Lauren," he claimed.
In addition to its vertical operation in Australia, the company does embroideries in China, dye and discharge printing in Italy and sourcing for the U.S. from Canada.
The company operates differently in the United States from the rest of its businesses around the world, Mann explained. "Outside the United States we operate as concessions; we rent space from department stores. In the United States, we have to get the buyers to like our products before they get to the customers."
In China, for example, the company has 55 shops. "We see China as much a market as a source," Mann said.
But despite the global marketing strategy, Mann admitted that the American market is quite different from the rest of the world. "It has a different view towards color. It tends to be more conservative, more muted," he said.
And the differences extend to the way the American market operates. "It's a show and sell market. There's very little of wanting to have points of differences, there's little loyalty and more conservatism in home furnishings. The global market moves quicker," he said.
Despite theses differences, Mann said that "although the U.S. is a relatively small piece of our worldwide business, and we are the least known there, it is extremely important as the largest and most prestigious market."
The company sees "opportunities to grow the American business either organically or through acquisitions," Mann added.
Chris Christiansen, who remains ceo of the New York-based U.S. operation, remarked, "We will consolidate our coordination globally. We lost some of that. But that's not to say we will follow all the dictates, but the overall look is important to any brand.
"We recognize that the market has changed, and we will take an aggressive new look at the top of the bed with new fabrics, layering."
CHAMP 1 Funds purchased the company with the management, including overseas executives. CHAMP is 50 percent owned by New York-based Castle Harlan Inc., which manages more than $2 billion in private equity capital. CHAMP 1 Funds provided $64 million of equity related capital, and UBS Warburg, as head of a bank syndicate, provided facilities for up to $103 million in revolving debt facilities, term loans and subordinated debt. CHAMP is prepared to provide additional resources for acquisitions and incremental growth globally.
For C.S. Brooks, future plans include "working on a joint venture in Mexico manufacturing home textiles that will allow us to be competitive enough to develop the U.S. market," said Johnson.
The company also remains focused on its Donna Karan New York and DKNY home textiles brands.
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