Women’s clothing brand Roman Originals has been inundated by calls since the photo became the center of an online debate.
The deal values the e-retailer at $878 million.
American Greetings Corp., which sells digital greeting cards and related products online, announced today that it has reached a deal to be taken private by a buyout group owned by the Weiss family, which dominates top management of the company. The deal is valued at $878 million, including the e-retailer’s debt obligations.
The Weiss family includes the company’s chairman, Morry Weiss, as well as his sons, Zev, the chief executive, and Jeffrey, the president and chief operating officer. If the deal is approved by the e-retailer’s board, the Weiss family will pay nonfamily shareholders $18.20 a share in cash plus a 15 cent per share dividend if the deal closes by its July target date.
“The transaction returns the company to private ownership in a way that we believe enables the company to continue to serve the interests of its customers, employees, suppliers and the communities in which it operates," says Jeffrey Weiss.
The move was not unexpected. CEO Zev Weiss, as head of a shareholder group, last September proposed buying all of the company’s shares at $17.18 apiece. The company then formed a committee comprised of members of its board of directors last October to consider a proposal to take the company private.
American Greetings, No. 208 in the Internet Retailer Top 500 Guide, generated online sales of $78.2 million in 2011, which was down 2.7% from $80.4 million a year earlier, according to the company’s 2012 annual report. In part, that was due to declining revenue from the online subscriptions the retailer sells that enable consumers to send any of the retailer’s e-cards, create and print cards on their computer and personalize paper cards, the report says. The number of subscriptions declined 2.6% in 2011—from 3.9 million in 2010 to 3.8 million in 2011.
In the third quarter of 2012, which was the last time American Greetings released a financial report, the company reported web sales of $16.0 million for the quarter ended Nov. 23, a 5.3% decrease from $16.9 million in the third quarter the previous year. Moreover, the retailer reported a loss of $809,000, compared with a year-earlier profit of $20.2 million.
The e-retailer has largely failed to establish sizable presences in either mobile commerce or social media. It not listed in either the Mobile 400, which ranks retailers by 2012 mobile sales, or the Social Media 300, which ranks retailers’ social skills on the percentage of web site traffic they receive from social networks.