Tiger Capital’s Gail Glave on the art of liquidation – WWD


Tiger Capital Group is in the business of liquidating retailers — and sometimes rescuing them.

“Liquidations are our bread and butter, as are wealth-based valuations. They work very well together,” said Gail Glave, Managing Director of Tiger Capital Group. “But our asset lending and finance group is becoming more of our business every day.”

OOn February 1, Francesca’s was sold to Tiger Capital, TerraMar Capital LLC and SB360 Capital Group LLC, allowing the teen and tween girl clothing chain to emerge from bankruptcy. The new Francesca has also received a $25 million revolving credit facility provided by Tiger and other lenders.

While New York-based Tiger has made several non-retail financings, Francesca’s first financing was with the firm retail trade. Prior to the investment, Tiger conducted many of Francesca’s store close-outs, but saw the chain’s profitability as it navigated the pandemic. “When you close a business for three or four months, it’s hard to sustain it,” Glave said. “Right now they are trying to increase online business and evaluate stores. You are allowed to close [more] saves, they cannot. The product is good. Your niche is good. We think they’re worth the risk of funding them.”

When asked about Tiger’s largest liquidation project, she replied, “Circuit City was one of the largest — over $2 billion worth of inventory. It was a joint venture. The large liquidations are generally joint venture arrangements because they are so large. Payless Shoes was another big company with over $2 billion and over 2,500 stores. Bon-Ton was another big liquidation that we did.”

Tiger also liquidated between 100 and 150 Sears Holdings Corp stores. “It was a company with thousands of stores,” Glave noted. “It’s less than 10 percent of what it used to be.” Tiger was also involved in the liquidation of several JC Penney Co. Inc. businesses.

“Most of the big ones were old concepts or so indebted that there was nothing to do but liquidate. With Francesca it is a company that we are saving because it is profitable there.”

Modells was another liquidation handled by Tiger. “Subpar professional New York sports teams haven’t helped the business. When your teams win, you sell a lot of products,” said Glave of the former New York sporting goods chain.

“We made Loehmanns years ago. I figured if they had the right funding and spent the money in the right places it could have lasted. They overstretched too quickly and couldn’t [procure] the goods to support the shops. Loehmann’s was at its best as a regional company.” But after exaggerating, Glave added, “Their footprint has probably gotten smaller than they need to be to be more profitable. On top of that, there was a lot of off-price competition.”

That Lord & Taylor Flagship store on Fifth Avenue before it closed on January 2, 2019.
Andrew Morales/WWD

Tiger Capital also oversaw the liquidation of the historic Lord & Taylor Flagship on Fifth Avenue in Manhattan. “I was in this building for four months. That was a very interesting sale,” said Glave. From other L&T locations: “The goal was to sell most of the clearance items for L&T. We received over 800 trucks of clearance items that needed tagging, hanging and displaying – 10 trucks a day for almost three months,” Glave said. “The logistics of getting so many trucks from the distribution center to the flagship was the deciding factor in the length of the contract.

“When customers were looking for a regular product, it wasn’t there. At a clearance sale, you expect regular merchandise.” Lord & Taylor’s clearance merchandise wasn’t bad quality, but it lacked depth in size. For example, certain tops had many large sizes but few small sizes. There were too many “little things,” Glave recalled.

While liquidations are Tiger Capital’s bread and butter, they can be bittersweet. “Lord & Taylor had great employees,” Glave said, noting that Tiger Capital also liquidated the L&T stores in Oak Brook, Illinois and Eatontown, NJ. “You get to know these people by working in their shops. Many of them are dedicated to the company. I never blame the people in the stores,” as for the bottom line. “They work as hard as they can to sell.”

Tiger Capital was also liquidated Barney’s New York, as part of a joint venture. “There was some mismanagement within the company and the rents and payroll for these stores were astronomical,” Glave said, explaining why Barney’s failed. “When they ran out of funding, the stores emptied and sales started to fall. Barneys wanted very exclusive top brands but they were struggling to get this product. Barneys also had an older customer base. They had to attract younger people, millennials.”

“They had a great name but needed a fresher makeover. They had cutting-edge fashions in some areas, but also men’s suits that just aren’t selling that well anymore. They had a lot of properties without a lot of product. Barneys became very economical with goods. I think someone new with really deep pockets who wanted to try it could have salvaged the concept… I wouldn’t blame the landlord. You have property that is worth a fortune.”

When Tiger Capital put up the closing time signs, the general public flocked in, while regular Barneys customers generally stayed at home. “We expanded the store with other products we bought from their vendors and we bought things that would fit into the sales. I don’t think the augment hurt sales. It actually helped a lot. We did very well with jewelry.”

Two separate windows in the flagship Barneys New York on Madison Avenue.

Windows has announced the liquidation of Barneys New York, which closed permanently in February 2020.
WWD

According to Glave, liquidations require expertise that the retailer does not necessarily have himself. “Some retailers lack data collection in the backend to be able to create the BI [business intelligence] reports. Also, some retailers fall in love with their wares and are slow to sell products in stores because they feel they must be worth more than a trustee can sell them.”

When asked if going through a liquidation was challenging, Glave replied, “It’s about knowing the product and using signs to kick sales and encouraging people to stay. Once we put the signs up we see a huge increase in sales which for Barneys may have been the opposite. This was a learning experience, when you put up the signs and offer the offers there is a beginning and an end. It’s usually two or three months and you’re done. We always try to get the store associates to understand that if customers see something today that is 20 percent off, they should understand that they are taking a risk and waiting until they come back to see if it’s 30 percent off and has not yet been sold.

“We conduct a comprehensive analysis of when the discount should be changed,” Glave said, explaining that this includes determining an item’s popularity, the rate of sale in-store and in competitor’s stores, and whether it is in-season or out-of-season Season, among other criteria. “We analyze products at a very detailed level, sometimes at the SKU, department or sub-department level. There’s a lot more science in it. You don’t just start with a 10 percent discount, then 20 and flip it at 30. Usually when we get to a company I’m amazed when they say you get better margins than we do.”

Tiger Capital's Gail Glave at the

Gail Glave

Last January, Glave was promoted from Director of Field Financial Operations to Managing Director. Over the course of her 23-year career tiger and predecessor company The Nassi Group, she has led many selective store closures and chain-wide liquidations and, as senior financial analyst and operations specialist, was responsible for financial modelling, tracking and analysis of daily sales data and on-site administration tigerthe field workers.

“Gail is at the forefront of liquidation analysis,” he said tiger Chief Operating Officer Michael McGrail. “Your leadership in development tigerInsight Analytics is based on their ability to analyze data in minute detail to uncover insights that improve our clients’ operations and sales. Additionally, their store level expertise is in retail trade Operations, including merchandising and discount modeling, is second to none. She teaches everyone a valuable “businessman’s perspective”. tiger projects.”

According to its website, Tiger appraises more than $30 billion in assets each year and facilitates the sale of more than $1 billion in unwanted assets.

“There’s a lot of four-wall analysis going on in all companies right now to weed out underperforming businesses,” Glave said. But the coronavirus is making it harder to get a clear view of store viability. “Perhaps you have a store that has done very well in the past. At the moment it just isn’t producing, so take the opportunity to get out of this building or risk staying in it? There is a lot of analysis behind it. Companies are looking for rental conditions. Shops in Chapter 11 renegotiate with landlords and may choose to stay in certain locations if [the landlord] helps. Everyone does. You need to look at the history of the store and determine if it made just money or a lot of money, or is there something that can be done to help it make money?

Glave believes there won’t be as many store closures this year as there were last year. “If we go back to what might be normal, we could see a huge retail rush,” she said. “There’s still a big market for people who want to touch and feel the product before they buy it.”

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