Versa Capital Management to Acquire United Retail Group
United Retail Group, Inc. owner of the Avenue brand of women’s fashion apparel, announced that it is seeking court approval for the acquisition of its operating business by an affiliate of Versa Capital Management, LLC, the successful bidder.
Pending court approval by the U.S. Bankruptcy Court for the Southern District of New York and the successful closing of the transaction, Versa, a private equity firm with significant experience in revitalizing retail operations, has agreed to acquire a majority of the company’s operating assets and to assume certain liabilities all as set forth in an asset purchase agreement signed on February 1, 2012.
A hearing to consider approval of the sale is scheduled for April 3, 2012 and the transaction is expected to close by mid-April. Following the sale, Avenue’s branded business will operate under Versa’s control while United Retail will remain in Chapter 11 to wind down its affairs and distribute the sale proceeds to its pre-petition creditors.
United Retail Group CEO Dawn Robertson said, “I have enjoyed developing the new strategy for Avenue and leading it through the Chapter 11 proceedings and the sale process as quickly as possible. Avenue’s operating business is now positioned on a sustainable path forward.” Robertson will be leaving United Retail Group to join another apparel company.
Versa has named Elizabeth Williams, a former member of Charming Shoppes’ leadership team and president of its Fashion Bug brand, to serve as CEO of the new company following the closing. Jim Smith, who serves as CFO of Bob’s Stores, a Versa portfolio company, will become CFO. Both managers have a long history of successful retail turnaround experience.
“We are extremely pleased to complement our existing retail portfolio with such a well-known brand in this growing segment of women’s fashion apparel,” commented Gregory L. Segall, CEO of Versa. “I want to thank Dawn Robertson personally for her tireless work and pivotal role in taking this business through a challenging transition. We wish Dawn well and know she will be successful in her next venture as well.”
Segall continued, “At the same time, we are very pleased to be able to bring in such high-caliber retail professionals as Liz Williams and Jim Smith to ensure a smooth transition and great start for the new company. Both Liz and Jim will serve on an interim basis until completion of a search for permanent senior management for this business. We expect to conduct the searches in the near future and both Liz and Jim will be actively considered as candidates for their respective roles. In the meantime, we are excited about the prospects for the Avenue stores and anticipate exploring new opportunities to better serve its customers nationwide.”
United Retail Group is advised by legal advisor Kirkland & Ellis LLP; financial advisor Peter J. Solomon Company; and restructuring advisor AlixPartners. Versa Capital’s legal advisor is Sullivan & Cromwell LLP.
Previously on abfjournal.com: