Vestis Retail Group, LLC, which comprises the East Coast-based Bob’s Stores and Eastern Mountain Sports retailers, has agreed to make a cash tender offer for all outstanding shares of the company at the rate $1.20 per share, amounting to about $17 million. Family- and management-owned shares will also be sold or tendered once the agreement is finalized.
The Connecticut-based Vestis, operated through funds advised by Versa Capital Management, LLC, has also agreed to assume $54 million in debt incurred by Sport Chalet as part of the deal, according to an investor relations adviser for the latter.
La Cañada civic leaders acknowledged the retail company as an important part of the business community.
“La Cañada Flintridge is very proud and honored that the Sport Chalet family has chosen LCF as its headquarter location since its inception and founding by the Olberz family,” La Cañada Mayor Mike Davitt said in an email statement. “They have been a great corporate partner and have provided many opportunities for residents and neighboring community members.”
Pat Anderson, president and chief executive of the La Cañada Flintridge Chamber of Commerce, said she was hopeful the retailer’s presence in the community would not be diminished under new ownership.
“Sport Chalet is a large company, and it is a well-known company. It is a longtime icon of our community,” Anderson said. “We’re all going to be anxious to see where this new adventure takes our store. I hope this works out for everyone.”
Founded in 1959 by La Cañada resident Norbert Olberz, Sport Chalet operated 50 stores in four states — California, Arizona, Utah and Nevada. It was a family-owned business until the company went public in the fall of 1992. In 2002, a new 27,000-square-foot corporate office was built to accommodate about 100 employees.
Olberz died in 2011, but his son, Eric Olberz, remained on the company’s board of directors until October 2013. He stepped down at that time to “make room for a new director whose experience is more closely aligned with the company's strategic growth initiatives,” a Valley Sun article quoted him saying at the time. The younger Olberz was not available for comment Wednesday.
Under the new arrangement, Sport Chalet's founding family members have agreed to sell to Vestis all of their shares, which represent approximately 68% outstanding shares, at $0.75 per share upon the closing of the deal.
Craig L. Levra, chairman of the board, chief executive and president of Sport Chalet, will remain in his position and continue to run the business out of Los Angeles, reporting to Vestis chief executive Mark Walsh, according to the news release announcing the purchase.
“For the past year we have methodically explored a wide range of options to position Sport Chalet for growth and to further our strategic initiatives,” Levra said in the release. “We believe Vestis is the ideal partner given its base of stores in the Eastern U.S. and synergistic vendor relationships, marketing focus and inventory platforms.
“We are ready for the next step, and we look forward to working with a company like Vestis that understands our customers, our market and our vendors, and has the financial resources to help us grow the business,” he added.
No stores are expected to be closed as a result of arrangement, and the Sport Chalet name and brand will be retained. Vestis' corporate headquarters will remain in Meriden, Conn.
Adding Sport Chalet to its portfolio will make Vestis one of the largest sporting goods retailers in the U.S., with more than 150 stores and $800 million in total sales for the 12 months ended Dec. 31, 2013.
“Sport Chalet greatly strengthens our position in the active lifestyle and outdoor categories, provides scale from which to grow, and diversifies our geographic footprint,” Walsh said in a June 30 statement. “We believe that Sport Chalet will benefit greatly from its addition to Vestis.”
As negotiations move forward, locals will wait and see what the outcome will mean for the La Cañada business community.
“I think [news of the sale] will raise a lot of questions, for sure,” Anderson said.
Follow Sara Cardine on Twitter: @SaraCardine.