Pet Supplies Plus and Buddy’s Home Furnishings operating under new company.
By Andrew Carlo
Franchise Group, Inc., along with its subsidiaries, have completed a restructuring plan and emerged from Chapter 11 bankruptcy protection.
The result is a new, streamlined company featuring “enhanced liquidity,” the franchise organization said.
As of June 2, a reorganization plan was confirmed by the U.S. Bankruptcy Court for the District of Delaware. This was done with the support of its key stakeholders, including secured and unsecured creditors and key business partners, according to the new company.
Pet Supplies Plus and Buddy’s Home Furnishings businesses are now owned by a newly-created Fusion Parent, LLC.
Franchise Group field for Chapter 11 last November and had planned to keep all of its holdings intact. This included Pet Supplies Plus, Buddy’s, The Vitamin Shop, and American Freight.
But last January, a U.S. bankruptcy judge approved the sale of up to 28 American Freight stores and one distribution center to AF Newco I LLC. The latter was was formed to acquire American Freight and plans.
In other moves, Franchise Group announced the sale of The Vitamin Shoppe to Kingswood Capital Management and Performance Investment Partners for $193.5 million. The deal was finalized on May 15.
This new version of the Franchise Group said that it intends to focus on “growing and supporting both franchises that continue to deliver strong results and benefit from over 200 new stores of aggregate actionable backlog.”
PSP and Buddy’s will now be led by a reconstituted board of directors comprised of five directors with significant consumer, retail, franchising and financial leadership experience.
This includes Chris Rowland, CEO of Pet Supplies Plus; Chuck Rubin, CEO of West Marine and former CEO of Ulta Beauty; David Barr, board member for a number of consumer companies, including Dogtopia and Domino’s Pizza China; Susan Lintonsmith, COO of European Wax Center; and Tim Johnson, former CFO and CAO for Victoria’s Secret & Co.
Franchise Group was advised by Kirkland & Ellis LLP and Young Conaway Stargatt & Taylor, LLP as legal counsel; AlixPartners as financial advisor; and Ducera Partners as investment banker.
The ad hoc group of debtor-in-possession and first lien term lenders was advised by Paul Hastings LLP as legal counsel and Lazard as investment banker.
