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Stocks Reporter Sep Pick *SWVC* P-2
WiseBuys Stores, Inc. Executes Agreement to Acquire Hacketts
Friday July 20, 9:38 am ET
WiseBuys agrees to acquire one of nation’s oldest retailers; the combined company will operate stores as “Hacketts”
NEW YORK--(BUSINESS WIRE)--WiseBuys Stores, Inc. ("WiseBuys") announced today that it has executed an agreement with its owners to acquire 100% of the stock of Patrick Hackett Hardware Company ("Hacketts"). Hacketts, which is one of the nation’s oldest retailers, currently has stores in New York State in the villages of Canton, Ogdensburg, Massena, Potsdam, and Watertown. WiseBuys current locations include Canton, Gouverneur, Hamilton, Pulaski, and Tupper Lake - all also in New York State.
“We are pleased to announce this agreement to acquire Hacketts,” stated Thomas Scozzafava, a co-founder of WiseBuys and current CFO. “WiseBuys and Hacketts combining into one entity is strategic for a number of reasons, including the sharing of managerial resources, increasing purchasing power, leveraging current advertising spending, and diversifying the combined company’s merchandise mix. We anticipate taking the best from both companies and combining those qualities under one roof under the store brand ‘Hacketts’,” Mr. Scozzafava added.
The acquisition, which calls for a $1.5 million payment at closing and additional payments of $4.5 million over eight years, includes management agreements for the retention of the founding family members as well as Hacketts current CEO.
About Hackett’s:
Hackett’s is one of the oldest retail establishments in New York State and the Nation. Its origins date back to 1830 when it was a ships chandlery, wholesale supplier and a traditional hardware store. During its evolution, it would also become a supplier of railroad equipment, builders and contractors’ supplies, plumbing supplies, steam fitting, tinsmithing, and a large foundry manufacturing many lines of metal plumbing items that you still find in existence today. Over the years, the company has adapted to changing market conditions and evolved into a full line department store focused on premium clothing, footwear, and gift items and today consists of five (5) locations:
(i) Ogdensburg, NY (55,000 sq. ft.) - full line department store
also featuring a coffee shop serving breakfast and lunch gourmet
specialties called North Water Street Coffee Company;
(ii) Potsdam, NY (41,000 sq. ft.) - a recently-opened (2004) full
line department store;
(iii) Watertown, NY (56,000 sq. ft.) - newly-opened (4th Qtr ‘06) full
line department store;
(iv) Massena, NY (12,700 sq. ft) - Hackett’s only mall location
opened in late 1999 with a focused selection of premium
clothing, footwear, and gifts;
(v) Canton, NY - a full line footwear department, apparel for men
and women, and a sporting goods department; (this would be
closed and the building sold or leased and operations moved to
WiseBuys.)
Hackett’s has an outstanding reputation within the industry as a customer service-focused organization selling premium products at a fair price - both of which differentiate it from “discount” big box retailers.
About WiseBuys:
WiseBuys Stores, Inc. ("WiseBuys") was formed and began operations in 2003 as a direct result of the closing of small-town retail staple, Ames Department Stores. Founded primarily by lifelong “north country” residents, WiseBuys initially focused its efforts on serving the “discount” retail needs of mostly rural communities throughout northern and central New York.
WiseBuys’ strategy included an innovative approach whereby it partnered with established and successful specialty discounters to create a “mall without the walls” concept. This innovative approach made easier to expand rapidly (five stores in thirteen months) because less capital was required for inventory, and partnering with niche players made immediately competitive across certain product lines. That is, although WiseBuys has only five stores, its pricing reflected the established purchasing power of Payless, KB Toys, etc. And from the customers’ perspective, WiseBuys had created a full line department store virtually over night. The concept was embraced by large, well-established retailers and was heralded in the industry. The following in-store retail partnerships with both national and regional chains were established:
Payless ShoeSource, Inc. - “store-within-a-store” deal across chain
KB Toys Inc. - exclusive license agreement “KB Toys at WiseBuys” branded department
RadioShack - franchise acquisitions
Card$mart, Inc. - franchise acquisitions
Home Fashion Distributor, Inc. - consignment inventory deal for domestics
Masters, Inc. - leased department deal for apparel (consignment inventory)
Massey’s Furniture Barn, Inc. - consignment inventory deal for furniture & mattresses
In addition, WiseBuys won such awards as the “New York State Small Business Development Center Excellence Award” (April ‘04) and the “Oswego County Job Creation Award” (June ‘04). WiseBuys current stores include the following:
(i) Canton, NY (40,000 sq. ft.) - full line department store;
(ii) Gouverneur, NY (53,000 sq. ft.) - full line department store;
(iii) Hamilton, NY (43,000 sq. ft.) - full line department store;
(iv) Pulaski, NY (59,000 sq. ft) - full line department store; and
(v) Tupper Lake, NY (34,000 sq. ft.) - full line department store.
The acquisition of Hacketts by WiseBuys is subject to financing arrangements by WiseBuys. Recently, GS Carbon announced an agreement to acquire about 60% of the voting stock of WiseBuys Stores, Inc., and is seeking to acquire additional shares of WiseBuys. Both WiseBuys and Hacketts will be subject to completed audited financials. WiseBuys recently engaged Syracuse-based accounting firm Dannible & McKee, LLP (http://www.dmcpas.com) to complete these audits.
GS Carbon (OTCBB: GSCR - News), which was acquired by Seaway Capital, is seeking additional debt and equity investments in retail, restaurants, media, business services, manufacturing, and technology companies.
Stocks Reporter.com has received no compensation in the form of cash or securities for coverage and has no position of SWVC shares.