Q&A: BlueSky Brands’ Richard Hebert on Recent, Future Acquisitions, Goals
Having recently signed licensing agreements with the catalog brands from nonprofit organizations, Winterthur Museum and the National Wildlife Federation, Allston, Mass.-based catalog holding firm BlueSky Brands now operates five titles, including Paragon Gifts, Bits & Pieces and Bits & Pieces UK. BlueSky Brands CEO Richard Hebert discussed with Catalog Success his company’s recent acquisitions, business strategies and plans for the future.
Catalog Success: What are BlueSky Brands’ goals?
Richard Hebert: We’re looking to grow organically, as well as through acquisition. We’ve been pretty acquisitive so far, having obtained five retail direct-to-consumer brands in addition to the AB&C Group, our fulfillment company. And you will certainly see us continue to be active in acquiring retail, Web and catalog brands in the next year.
CS: Are you leveraging the AB&C Group to improve the catalog brands you’ve already acquired?
RH: We have two businesses at AB&C. One is our third-party fulfillment business, which is very important to us. We are investing significantly in that business. There are obvious economies of scale to be leveraged in the fulfillment area. We’re looking to leverage the third-party fulfillment business across the other brands.
CS: Regarding the licensing agreements with Winterthur and the National Wildlife Federation, what’s in it for BlueSky?
RH: We’re licensing the brands. We’re running the catalog businesses for them, operating them on their behalf. We gain all the benefits of operating those businesses as if we own them. But we don’t own them. These are licensing agreements with the sponsoring institutions and we work in close partnership so to the consumer it appears as if there’s no change.
CS: What are your immediate plans for those two licensed brands?
RH: We want to grow them. We’re investing in infrastructure, such as new e-commerce platforms and expanded e-marketing, in addition to expanding traditional catalog marketing. We’ll also test alternative direct marketing strategies.
CS: Is the infrastructure for those brands remaining in place?
RH: The front end of these businesses, the brand team, which consists of marketing, merchandising, creative and inventory management will remain intact. At corporate, we’ll take on the human resources, the finance and the administration side of things. These two businesses have separately contracted with AB&C to operate their fulfillment.
CS: Do you envision BlueSky becoming another Golden Gate Capital?
RH: Yes, we’re a consolidator. We’re focused on acquiring strong, middle-market brands in the gift and home and garden sectors.
CS: What’s an ideal acquisition for Blue Sky? What are you looking for, in particular, in a catalog company?
RH: We’re looking for businesses with strong brands, good operating histories, profitability, good management teams that are willing to stay in place and run the businesses for us.
CS: Who bankrolls BlueSky?
RH: Reliant Equity Investors is the principal private equity partner; Smith-Wiley is the secondary private equity partner.
CS: What kind of catalog experience/expertise does Bluesky bring to the table?
RH: I’ve been in the business since the early 1980s. I grew up, if you will, at MBI in Norwalk, Conn. (a consumer products marketing firm). I learned the direct-to-consumer business there. After that, I ran a direct marketing services agency.
CS: Where do you see BlueSky in the next five years? Will you continue to be a major catalog player?
RH: Catalog isn’t our sole focus. We’re looking to put together a portfolio of direct merchandise companies. A lot of them happen to be catalog, but there are many companies out there that have a big Web component or other direct channels. Whether it’s solo direct mail, direct response TV or print. We’re not confining ourselves to just catalog, but we do intend to be a big player. That’s our ambition and we’re aiming accordingly.
For an indepth analysis of BlueSky Brands’ recent licensing deals with Winterthur and the National Wildlife Federation, check out Larry West’s M&A: Q&A feature on CatalogSuccess.com or click here.
