Four deals: BikeCo replaces Advanced Sports, David’s Bridal reorganizes again, SevOne sold, CSC buys in Europe
David's Bridal says debt cuts will make it more competitive in a retail business that has been reshaped by the internet and again by Chinese tariffs.
Minus its stores, the Northeast Philly-based warehouse arm of the bankrupt Advanced Sports bicycle group says it’s back in business as BikeCo LLC, a wholesaler of four familiar brands that Advanced used to ship: Fuji, SE, Breezer, and Tuesday.
“Now under new ownership and new leadership, we have reorganized under BikeCo and are successfully back in business, servicing our more than 1,500 bicycle dealers in the U.S.A.” and distributors throughout the Americas, said Milay Galvez, sales and marketing manager at BikeCo and a former Advanced Sports manager, in an email.
The group’s former Performance Bicycle shops in Philadelphia and 100 other cities closed last winter.
The new owner is Hong Kong-based Advanced Holdings, headed by George Hsu. Retail liquidator Tiger Group — best known for shutting down Circuit City and Toys R Us — helped Advanced buy the company in bankruptcy for $16 million, then sold its stake to Advanced, Tiger said in a statement last month. Another company, K&B Investment, bought the warehouse on Dutton Road, where 33 of BikeCo’s 42 employees now work, down from more than 80 under the previous owner. Frank Zimmer, an Advanced veteran, is BikeCo’s president; newly hired Christopher Oatway is CFO.
Another goal, Galvez added, is “finding good resolution of the current ‘trade war’ with China that is impacting our industry and our customers.” The predecessor company imported most of its bikes from China. BikeCo didn’t immediately respond to sourcing questions.
Gone from the new company is Advanced Sports’ former leader, Patrick J. Cunnane. Squeezed by the Trump import tariffs and tough competition, the company filed for bankruptcy protection last year, nine days after his wife, U.S. Rep. Madeleine Dean (D., Pa.), was elected to Congress.
“I am not advising them at this time,” Cunnane told me in an email. “Hopefully, I helped the team ‘learn how to fish.’” He called the management group “talented and resourceful” and predicted “great things from BikeCo in the future.”
Conshohocken-based David’s Bridal says it has refinanced operations as it struggles to compete as a national chain of 300 wedding and prom dress stores.
In a statement, David’s said it has “firm commitments for $55 million in new capital” from its lenders, which include Los Angeles-based distressed-company specialist Oaktree Capital, “to fund growth,” plus a deal to convert $276 million it owes banks and investors into owners’ shares.
The company says the deals leave it with $75 million in debt, down from more than $500 million before its bankruptcy organization earlier this year.
“We are executing a compelling transformation strategy that is centered around our customer,” said Jim Marcum, chief executive, in a statement. He pledged to “modernize” branding and marketing, add wedding-planning software, and improve customer service.
Founded in the early 1990s by real estate investor Steve Erlbaum, the company went public in 1999 and was purchased by a predecessor of the Federated department store group for $405 million the next year. It was acquired for $750 million by the Leonard Green private equity group in 2006 and for $1.1 billion by the Clayton Dubilier & Rice investment group in 2012. The investors piled on debt and extracted cash from the firm until they stopped paying creditors last year and let them take over in bankruptcy proceedings.
In Delaware, SevOne, the network performance monitoring and diagnostics firm that counted Comcast and Verizon as clients, has been acquired by application-resource management software maker Turbonomic, which, like SevOne, is controlled by Bain Capital Ventures of Boston, said Turbonomic boss Benjamin Nye in a statement.
The price was not disclosed. “The Newark [Del.] office will remain our technology hub and will continue to expand as our needs do,” said spokeswoman Liz Erk in an email. SevOne employs 250.
SevOne had attracted more than $200 million in investment capital, and its two-story Newark offices sported such flashy features as a stainless-steel sliding board from the foosball table area down to the entrance.
Early investors, including Osage Venture Partners of Philadelphia and former SunGard Data Systems chair John Ryan, and others were repaid when Bain led a new $150 million investment into SevOne in 2016. SevOne’s previous CEO, Michael Phelan, a Paoli native, had hoped to take the company public.
But the Bain deal was followed by the departures of SevOne cofounders Vess and Tanya Bakalov, who went on to join other Bain-backed companies. Turbonomic officials declined to comment on plans for the Delaware office.
Separately, CSC, the corporation services company that employs nearly 1,000 at its suburban Wilmington office and around the world, says it has agreed to buy TCS-Groep, a Netherlands-based corporate services purveyor to alternative-investment funds. Terms were not disclosed. CSC already has European offices in London, Luxembourg, and Dublin.