Marwit Investment Management LLC in Newport Beach sold Irvine-based Boot Barn Inc. to another private equity fund on undisclosed terms.
The transaction is the first sale by Marwit’s second fund—Marwit Capital Partners II. The $184 million fund typically invests in businesses with revenue of $20 million to $200 million, with a focus on investments in California and the West Coast.
The buyer is Los Angeles-based Freeman Spogli & Co., which focuses on retail services, distribution and consumer products companies. It has invested more than $2.8 billion in 45 portfolio companies since 1983.
$160M in Sales
Boot Barn is a specialty retailer of Western and work apparel with 85 stores in eight states, 850 employees and about $160 million in annual revenue. The retail chain, which sells jeans, shirts, boots and accessories, faces competition from brands including San Francisco-based Levi Strauss & Co. and Greensboro, N.C.-based Wrangler.
Marwit acquired Boot Barn in 2007, about the same time founder Ken Meany retired. Meany’s son Patrick has been chief executive since and will remain on the post.
“We’re really focused on the western U.S. right now,” Patrick Meany said. “But we are looking outside that for the near term in states like Kansas and Nebraska. Two other states we’re about to pull the trigger on are Idaho and Utah.”
Marwit helped the retailer boost sales by 166% over the four-year holding period.
“Boot Barn has been our largest investment and certainly a successful one,” said Chris Britt, a Marwit managing partner. “The revenues are up three-fold, and the profit is almost four-fold, all in the worst economic climate.”
The fund’s Boot Barn investing made some people nervous, Britt noted.
“When we were investing additional in this business in the second half of 2008, many of our limited partners, in fact, were asking questions, and legitimately so,” he said. “But there were tremendous opportunities to expand this business during the height of the (economic) crisis. Those moves really contributed to the outside returns.”
Dallas Deal
Marwit’s strategies with Boot Barn included buying clusters of stores of Dallas-based BTWW Retail LP when it went into bankruptcy.
Britt expects Freeman Spogli to take Boot Barn further.
“We work with entrepreneurs and family businesses to create a scalable enterprise,” Britt said. “And because it’s scalable, someone like Freeman Spogli who’s got a much larger fund can come in and take the company to what you hope is a greater end.”
Marwit has investments in other OC companies including Promax Nutrition Corp. in Newport Beach and Western Emulsions Inc. in Dana Point.
