Retail Ventures

Retail Ventures, Inc. was a United States retail holding company formed in 2003 to organize and manage interests in several discount and off-price retail businesses. Its principal businesses were DSW, a national footwear retailer; Value City Department Stores, a discount department-store chain; and Filene's Basement, an off-price apparel and accessories retailer. The company was connected to the Schottenstein family retail group, whose businesses had long operated in department stores, footwear, furniture, and related retail categories. The company's corporate history developed from Value City Stores. Value City completed an initial public offering in 1991, making it the publicly traded platform through which the group expanded. In 1998, Value City acquired the DSW shoe business, which later became the group's strongest growth asset and developed into a large national chain. In 2000, Value City acquired Filene's Basement, adding an established off-price apparel retailer to its portfolio. Retail Ventures was subsequently created in 2003 as a holding-company structure for DSW, Filene's Basement, and Value City Department Stores. Retail Ventures did not operate as a single-format consumer brand. Instead, its portfolio covered several forms of value-oriented retail. DSW focused on branded footwear sold through large-format stores and later also supplied merchandise to unaffiliated retailers. Value City Department Stores offered discounted apparel, home goods, and general merchandise, while Filene's Basement was known for off-price fashion and closeout-oriented retailing. Separately owned Value City Furniture stores were associated with the wider Schottenstein business network but were not part of the 2008 transfer of the department-store business. The company faced strategic and financial pressure as the department-store sector weakened. In December 2006, Retail Ventures said it had engaged Financo and CIBC World Markets to advise on strategic alternatives, including a possible sale of the Value City Department Stores division. On January 23, 2008, it announced the disposition of an 81 percent ownership interest in that business to VCHI Acquisition Co., a newly formed entity backed by VCDS Acquisition Holdings, Emerald Capital Management, and Crystal Value. The transaction separated Value City Department Stores from Retail Ventures while leaving DSW under Retail Ventures' control and providing Filene's Basement with a new secured credit facility. At the time of the 2008 transaction, Retail Ventures continued to operate 259 DSW stores in major U.S. metropolitan areas. DSW also supplied shoes under contractual arrangements to hundreds of locations operated by other unaffiliated retailers. The company announced a merger with DSW in February 2011. That transaction ended Retail Ventures as an independent corporate structure and consolidated the surviving public-company identity around DSW. Retail Ventures is therefore best understood historically as a portfolio holding company and predecessor to the modern DSW corporate organization, rather than as a continuing standalone retail chain.

Retail Ventures emerged from the corporate development of Value City Stores, a discount retail business associated with the Schottenstein family. Value City became publicly traded through an initial public offering in 1991. The public company later expanded beyond its original department-store format by acquiring the DSW shoe business in 1998 and Filene's Basement in 2000. DSW was especially important to the portfolio. The chain provided a national platform for selling branded footwear at discounted prices and eventually operated hundreds of stores across major U.S. metropolitan areas. Filene's Basement added an off-price apparel and accessories format, while Value City Department Stores remained the group's broad discount department-store operation. These assets served different customer needs but shared an emphasis on value pricing and branded merchandise. In 2003, Retail Ventures, Inc. was created as a holding company for DSW, Filene's Basement, and Value City Department Stores. Schottenstein Stores Corp. held a controlling interest in Retail Ventures and also had an interest in DSW. Jay Schottenstein served as chairman of Retail Ventures and was also associated with the leadership of DSW and Schottenstein Stores Corp. In the Columbus, Ohio, market, Value City stores had previously been known as Schottenstein's, a name honoring founder Ephraim Schottenstein; the name was later discontinued after the department-store business was sold to Burlington Coat Factory. The portfolio became increasingly difficult to manage as traditional department stores faced competitive pressure from specialty retailers, off-price chains, and changing consumer shopping habits. In December 2006, Retail Ventures disclosed that it had hired Financo and CIBC World Markets to examine strategic alternatives for Value City Department Stores, including a potential sale. The announcement reflected an effort to separate or restructure the weaker department-store operation while preserving the value of DSW and other assets. On January 23, 2008, Retail Ventures announced the sale of an 81 percent ownership interest in Value City Department Stores to VCHI Acquisition Co. The buyer was described as a newly formed entity owned by VCDS Acquisition Holdings, VCHI-related interests, Emerald Capital Management, and Crystal Value. As part of the transaction, wholly owned subsidiary Filene's Basement entered into a new $100 million secured credit facility with National City Business Credit. The new facility replaced a predecessor facility of $275 million that had been shared with Value City Department Stores. The transaction did not include the separately owned Value City Furniture business. Following the transfer, Retail Ventures continued operating DSW, reporting 259 stores in major metropolitan areas throughout the United States. DSW also supplied footwear under supply agreements to 342 locations operated by other, unaffiliated retailers. The company stated that employee numbers and benefits were expected to remain unchanged during the Value City transfer. This period marked the practical transformation of Retail Ventures from a broad multi-format retail portfolio into a company increasingly centered on DSW. Retail Ventures announced a merger with DSW in February 2011. The merger ended Retail Ventures' existence as an independent corporate structure and completed the transition of the group's public-market identity toward DSW. Its historical significance lies in the way it brought together discount department stores, off-price fashion, and specialty footwear before separating the weaker department-store assets and ultimately combining with its most durable operating business.

• 2011

  Retail Ventures announces merger with DSW

  [1]Retail Venturesen.wikipedia.org

  The announced merger with DSW consolidated the corporate structure around the footwear retailer and ended Retail Ventures as a standalone company.

• 2008

  Majority interest in Value City Department Stores is transferred

  [1]Retail Venturesen.wikipedia.org

  Retail Ventures disposed of an 81 percent interest in Value City Department Stores and established separate financing arrangements for Filene's Basement.

• 2006

  Strategic review of Value City Department Stores

  [1]Retail Venturesen.wikipedia.org

  Retail Ventures engaged financial advisers to assess strategic alternatives, including a possible sale of the Value City Department Stores division.

• 2003

  Retail Ventures is formed

  [1]Retail Venturesen.wikipedia.org

  Retail Ventures, Inc. was established as a holding company for DSW, Filene's Basement, and Value City Department Stores.

• 2000

  Filene's Basement joins the portfolio

  [1]Retail Venturesen.wikipedia.org

  Value City acquired Filene's Basement, broadening the portfolio into off-price apparel and accessories.

• 1998

  Value City acquires the DSW shoe business

  [1]Retail Venturesen.wikipedia.org

  Value City purchased the DSW shoe business, adding a specialty footwear operation that later became the central asset of the Retail Ventures group.

• 1991

  Value City completes its initial public offering

  [1]Retail Venturesen.wikipedia.org

  The Value City business became publicly traded, establishing the corporate platform from which the later Retail Ventures portfolio developed.

A value-oriented retail holding company whose portfolio combined national footwear retailing, off-price fashion, and discount department stores.

• Specialty footwear retail · 1998

  DSW

  DSW was the group's principal specialty-retail business. It operated large-format stores offering branded men's, women's, and children's footwear, generally emphasizing broad selection and value pricing. By 2008, Retail Ventures reported operating 259 DSW stores in major U.S. metropolitan areas. DSW also supplied footwear to hundreds of locations operated by unaffiliated retailers under supply arrangements.

• Off-price apparel retail · 2000

  Filene's Basement

  Filene's Basement was an off-price retailer of apparel, accessories, and related fashion merchandise. Retail Ventures acquired the business through Value City in 2000. Its operating and financing arrangements were revised during the 2008 separation of Value City Department Stores, including a new secured credit facility.

• Discount department stores

  Value City Department Stores

  Value City Department Stores was the group's broad discount-store format, selling categories such as apparel, home merchandise, and general goods. Retail Ventures reviewed strategic alternatives for the division and in 2008 transferred an 81 percent ownership interest to VCHI Acquisition Co. The separately owned Value City Furniture business was not included in that transaction.

• 2011

  Merge Retail Ventures with DSWM&A

  Background

  After the separation of the Value City department-store business, DSW had become the central operating asset associated with Retail Ventures.

  Action taken

  Retail Ventures announced a merger with DSW in February 2011.

  Aftermath

  The merger ended Retail Ventures as an independent corporate structure and consolidated the business around DSW.

  Source

• 2008

  Transfer 81 percent of Value City Department StoresM&A

  Background

  Retail Ventures sought to separate the Value City Department Stores operation from the rest of its portfolio while maintaining its DSW business.

  Action taken

  The company disposed of an 81 percent ownership interest to VCHI Acquisition Co., a newly formed buyer backed by several investment entities.

  Aftermath

  Retail Ventures continued operating DSW, while Filene's Basement received a new $100 million secured credit facility and the former shared $275 million facility was terminated and replaced.

  Secured credit facility for Filene's Basement. $275 million shared facility → $100 million facility (2008 transaction)

  Source

• 2006

  Review strategic alternatives for Value City Department StoresStrategy

  Background

  Retail Ventures faced pressure in the department-store segment and evaluated whether Value City Department Stores should be sold or otherwise restructured.

  Action taken

  The company retained Financo and CIBC World Markets to advise on strategic alternatives, including a possible sale.

  Aftermath

  The review was followed by the 2008 transfer of a majority ownership interest in the department-store business.

  Source

1. 1Retail Venturesen.wikipedia.org