San Francisco-based Gryphon Investors has acquired western wear retailer Sheplers for an undisclosed amount.
Sheplers offers a full line of men’s, women’s and children’s western boots, jeans, apparel, gifts and accessories in 19 stores located in the Midwest, Southwest and West. The company also sells its products through a catalog and a website. Gryphon bought the company from Sheplers’ management and Jabara Ventures Group, which has been a shareholder in Sheplers for around 20 years.
Kurt Kaull, a partner at Gryphon, said Sheplers is a perfect fit for the firm’s investment model.
“We look for niche specialty retail businesses with a strong brick-and-mortar store base, but that are also in the early stages of having a multi-channel integrated distribution platform,” Kaull said.
Gryphon sees Sheplers’ catalog and internet distribution channels, which Kaull said are “not as integrated and developed as they could be”, as key areas of growth. Beyond this primary priority, Kaull said Gryphon will likely open new stores, and later seek add-on acquisition opportunities.
Kaull was also optimistic about Sheplers’ potential for organic growth.
“Western wear is a solid growth category,” he said. “It’s somewhere between three and eight percent industry growth [per year].”
Mark Syrstad will succeed Sheplers’ current chief executive officer, Mike Anop. Syrstad has worked with Gryphon before as a retail industry consultant, and assisted the firm with the acquisition of tuxedo rental company Gingiss Formalwear in 1999.
This is Gryphon’s third investment in retail apparel. In 1999 the firm acquired a controlling stake in Gingiss. Early this year Gryphon bought Oregon-based Joe’s Sports and Outdoors for an undisclosed amount.
Gryphon makes leveraged acquisitions and growth investments in middle-market companies, seeking to make investments of between $25 million and $75 million. The firm manages more than $900 million in equity capital.