Broder Bros. acquiring Alpha Shirt Co
PHILADELPHIA – Two of the largest wholesale distributors in the promotional wearables marketplace – Detroit-based Broder Bros. and Alpha Shirt Co. of Philadelphia – will become owned by the same company by early October, sources confirmed to Wearables Business in early September.
Bain Capital of Boston, an investment banking house that has owned Broder Bros. for several years, said in a September 5 release that Broder Bros. will acquire Alpha Shirt Co. in a deal that should have closed sometime between September 20 and the end of September. Alpha Shirt Co. has been owned by a Cleveland investment banking firm, Linsalata Capital Partners, since 1999.
Mark Barrocas, vice president of sales and marketing for Alpha Shirt Co., confirmed that an acquisition was in process, however he added that management of the two wholesale distributors had not been in contact with each other.
As for what would happen with the two businesses after Bain became the owner of both, Barrocas said, “Clearly there will be two brands in the marketplace for as far as we can see at this point.”
Other sources close to the situation earlier told Wearables Business that the two companies – each well on the way to building a 2004 catalog – would operate independently in the 2004 catalog year, and that no determination had been made about operations after that time. However, sources added that corporate operations of Broder Bros. in Detroit would move by the end of this year and that both brands would be managed from Alpha Shirt Co.’s base in Philadelphia.
Additionally, sources said that “clearly there will be consolidation of operations” following the acquisition, and that while the brand names will be maintained separately, the warehouse operations will be merged.
Broder Bros. was recently listed as the No. 2 supplier in the promotional products industry in The Counselor magazine from ASI in its annual Top 40 Suppliers listing. Using sales figures for the calendar year 2002, Broder Bros., a privately held firm, was said to have had 2002 promotional sales of $197 million, down from $212 million the year before. Alpha Shirt Co., also privately held, ranked as the third-largest supplier on the same listing, with 2002 promotional sales of $177.4 million, up from $174.5 million reported for 2001. It should be noted that these sales figures cover only sales to promotional products distributors and not to other types of customers, like decorators or uniform dealers, and overall sales figures for both Broder Bros. and Alpha Shirt Co. would be substantially higher.
In the same ASI listing, Broder Bros. reported having 14 U.S. warehouse locations, while Alpha Shirt Co. said it maintained five locations. The two got to these numbers in different ways. Detroit-based Broder Bros., since its acquisition by Bain, has been on a buying spree, acquiring such smaller wholesale operations as Full Line Distributors, Gulf Coast and T-Shirts & More to build its stable of warehouse locations. Alpha Shirt, on the other hand, has been building its warehouse locations across the country from scratch, setting up new locations beyond its Philadelphia headquarters in Florida, Indiana, Texas and California.
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