By David Gill
The latest chapter of the Croscill saga has begun—with its new owner, Patriarch Partners, looking ahead to revamping and re-establishing the company’s brand.
It’s also the first chapter in Croscill’s history that is taking place without the founding Kahn family. The Kahns sold Croscill to Patriarch Partners in November, ending 62 years of ownership.
Founded in 2000 by Lynn Tilton, its chief executive officer, Patriarch Partners has established a business model involving acquiring distressed companies and turning them around. “We make diamonds out of dust,” Tilton said. “When we save companies other people would liquidate, we make the world a better place.”
For the past 20 years, Croscill has been one of the textiles industry’s most recognizable brands, and the company was widely admired for the creativity of its product design and merchandising. But it was rocked in recent years by the loss of bedding business at J.C. Penney, once its largest customer; the acquisition of May Co. by Federated Department Stores, which resulted in a further loss of sales; and the liquidation of Linens ’n Things.
Explaining the Croscill acquisition, Tilton said, “We needed a great brand name and Croscill is that. Croscill needs to be revamped and recharged because it has lost its glitter. Hopefully, we can give it a new charge for the future.”
While specific details on Patriarch Partners’ forward progress with Croscill have yet to be worked out, the top leadership has been put in place. Barry Leonard—president of Glenoit and Ex-Cell Home Fashions, both also owned by Patriarch—has become president of Croscill as well, reporting directly to Tilton. Although Leonard leads all three companies, they will continue to operate as separate entities for the time being.
Also, Cliff Campbell, chief financial officer for Ex-Cell and Glenoit, has assumed the same post with Croscill. Carl Legreca, who had been president of Croscill, is now president of merchandising, and is responsible for the design, development and merchandising of Croscill’s product line. Both Campbell and Legreca report to Leonard.
While the Croscill brand may have taken hits in recent years, Leonard said it still carries a lot of muscle. It also has synergies with both Ex-Cell and Glenoit in terms of product sourcing from China, warehousing and distribution.
“The consumer understands the Croscill brand,” he said. “Now we have the opportunity to take the business and figure out a way to better utilize the brand.”
Leonard said that while the leadership has yet to decide on how specifically to make this happen, they will look at product categories that Ex-Cell and Glenoit offer now—“if it makes sense,” he added.
On the shopping end, “We need to get closer to the end customer,” Tilton said. “I think that in this tough economy, people will spend more time at home, and we need to get home furnishings to people at their homes.”
Tilton added that one way for Croscill to reconnect with its customers is through a revamped Web site. Again, details on this were unavailable, but the ultimate goal is to develop relationships with shoppers so that they know what they will buy when they reach the store, Leonard said.
Tilton identified the Croscill customer base as consisting of two groups: the high-end consumer, toward which the company’s White Label program is geared; and specialty-store shoppers, for whom its other brands are targeted. The latter “needs unique products,” she said. “There is also a huge niche in high-end stores. We have to go back to being the brand and design leader for both of these customers.”
Discussing the deal in an interview with HFN, Doug Kahn, Croscill’s former CEO, said the loss of sales with the three major retail customers was a major factor in the Kahn family’s final decision. Kahn said the company weighed options, including merging with another company and acquiring another company in its own right.
“The driving factor in selling to Patriarch Partners was that it made sense,” Kahn said. “We feel we’re leaving the company in good hands. I respect Barry and Lynn, who can take the company and the brand and the people forward.”
As buffeted as Croscill’s business has been recently, the company still draws the same respect from the market that it has for decades. “Croscill has always been a straight, admirable, honorable and honest competitor,” said Frank Foley, president and CEO of CHF Industries. Foley added that he is also acquainted with the new ownership. “They’re smart people,” he said. “They’ll figure it out.”
