Retail investors have been given a second chance to buy the Colorado brand, with the struggling clothing label now up for sale again less than two years after the business was bought out of receivership.
The footwear and apparel retailer is owned by two private equity firms Anchorage Capital Partners and Ice Canyon, after the firms bought the majority of the business in 2011.
According to Fairfax, the business is once again up for sale. Attempts were reportedly made 18 months ago to sell Colorado and some of the other brands in Fusion Retail Brands, but offers of around $110 million were said to be too low.
In September 2011, Colorado Group was relaunched as Fusion Retail Brands, including the labels JAG, Diana Ferrari, Mathers and Williams. The group emerged from the receivership with 282 stores and 2200 employees.
SmartCompany contacted Fusion Retail Brands, but no one was available to comment prior to publication.
Fusion Retail Brands chief executive Don Grover told Fairfax the latest sale attempts are not a distressed sale.
Chief executive of the Retail Doctor Group, Brian Walker, told SmartCompany buyers will be looking to snap up the brand at a cheap price – and notes the retail apparel market has changed.
“Colorado was a very successful retailer which lost its way. Even with the most valiant efforts of the retailer’s new management, it’s still not the same horse that it used to be.
“At the end of the day, it was a business which really needed an intense review of its strategy and its operating business model. They’ve gone some way to achieve this, but competition has only gotten sharpers, costs are increasing and they don’t have a differentiating position in the market,” he says.
Walker says the company’s problems started when it dabbled in apparel.
“The fundamental dilemma occurred when it went from shoes into apparel. They wanted to be all things to all people, but as tempting as it is, it very seldom works.
Walker says it’s possible for the retailer to return to prosperity, but an even greater overhaul would be needed.
“They really need to have a look at what’s going on within the company, but they have some very clever people working there too, so perhaps there’s more going on than meets the eye. “
“Ultimately it’s the consumer that votes and at the moment they’re not voting for the re-election of Colorado,” he says.
The Colorado Group had a debt of over $400 million but the receivers from Ferrier Hodgson reduced this by 75% through the receivership process.
Upon creation in 2011, Fusion Retail Brands said it would make “significant investments in cap-ex and marketing over the next four years”, according to a company statement. It was said to be investing $40 million and more than $30 million in marketing and has worked on restructuring the business and cutting costs.