Teen-focused direct marketing specialist Alloy on Thursday announced a major push into the offline retail business with a $50 million bid to acquire New York-based clothing retailer Delias Corp.
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Alloy, which has been on an acquisition
binge in recent months, plans to shell out about 93 cents per share for all of Delias’ outstanding stock. The total purchase price is in the range of $50 million and would create a combined firm with about $300 million in annual revenue.
With a strong presence in the teen market, Alloy adds a clothing and accessories retailer with a major offline presence. Delias, once a high-flying Silicon Alley dot-com, now operates about 70 stores sprinkled throughout the U.S. and also sells from online catalogs.
Together, Alloy said the merged firm will have a database of more than 20 million names; a stable of recognized distribution brands; and platforms in direct marketing, retail stores and product licensing.
Former J. Crew chief operating officer Walter Killough has been hired to work with the combined company but Alloy did not release information on his designation or responsibilities.
“In addition, our media and advertising offerings will be enhanced by the reach of Delia’s print catalog circulation, Web site traffic and physical presence in shopping malls,” the company said in a statement.
Alloy expects the acquisition to generate a combination of revenue and cost savings of about $10 million to $15 million annually.
Alloy chief executive Matt Diamond hinted that the company’s aggressive acquisition strategy would continue. “We plan to be proactive in exploring value creating transactions involving the merchandise business including receipt of a strategic investment, a merger, an outright sale, or a full or partial leveraged spin-off to the public,” Diamond said.
In recent months, Alloy has gobbled up
YouthStream Media Networks’ Media and Marketing Services unit and also added the assets of Old Glory Boutique Distributing for $9.6 million in cash.
The company also spent $15.6 million to purchase of Off Campus Marketing, a direct marketing firm owned by youth-focused company Student Advantage. Before that, Alloy acquired high school and college marketer 360 Youth, BMX biking site Dan’s Competition and college focused marketer CASS Communications.