Mann Report Retail
12/2009
BYLINE from Jennifer Herber,
Consumer/Retail Investment Banker with Stephens
Facing difficult macro-economic
conditions, many retailers have retrenched, focusing on core
business lines, distribution channels and markets to minimize
performance deterioration. Retailers should take a vigorous look at
the health of their balance sheets, management teams and overall
operating performance to determine their next strategic move. Those
in a position of weakness may need a capital infusion to "ride out"
the storm; those in a position of relative strength may look for
new capital to make organic growth investments or to pursue low
cost acquisitions that will ensure a competitive advantage during
the inevitable upturn.
Identifying alternative capital
sources in a constricted debt/equity credit market is not as
difficult as assumed. Historically defined as “buyout firms”,
private equity is deploying unutilized capital for distressed
investing, loan to own situations, private investments in public
entities (PIPEs), partnering with corporate buyers and minority
investments. By taking advantage of the private equity-offered
creative structuring while the public markets recover, retailers
can accumulate capital without ceding majority ownership,
governance rights or operating control.
The facts described in this
summary have not been independently verified and the opinions
expressed are the individual opinions of the author. This summary
will not be updated if additional facts come to light or if the
opinions of the author change in the future.