Tiger Capital’s Gail Glave on the art of liquidations

The Tiger Capital Group is in the business of liquidating retailers – and sometimes saving them.

“Liquidations are our daily bread, along with asset-based valuations. They work really well together,” said Gail Glave, managing director of Tiger Capital Group. “But our asset lending and financing group is becoming more of our business every day.”

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OOn February 1, Francesca’s was sold to Tiger Capital, TerraMar Capital LLC and SB360 Capital Group LLC, lifting the teen and tween fashion chain out of bankruptcy. New Francesca also secured a $25 million asset-based revolving credit facility provided by Tiger and other lenders..

While New York-based Tiger has completed several non-commercial financings, Francesca’s marked the company’s first in retail. Prior to the investment, Tiger carried out numerous Francesca store liquidations, but saw the viability of the chain as it navigated through the pandemic. “When you close a store 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. They may close [more] stores, they can’t. The product is good. Their niche is a good one. We think they are worth the risk to help fund them.

When asked what was Tiger’s biggest liquidation project, she replied, “Circuit City was one of the biggest – over $2 billion in inventory. It was a joint venture. Large liquidations are usually joint venture agreements because they are so large. Payless Shoes was another big hit, over $2 billion and over 2,500 stores. Bon-Ton was another huge sell-out we ran.

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

“Most of the big ones were old concepts or so indebted that there was nothing to do but liquidate. With Francesca’s, it’s a business we’re saving because there’s viability there.

Modell’s was another liquidation run by Tiger. “New York’s underperforming professional sports teams haven’t helped the company. When your teams win, you sell a lot of product,” said Glave of the former New York-based sporting goods chain.

“We did Loehmann years ago. I thought if they had the right funding and spent the money in the right places, it could have lasted. They grew too much too quickly and could not [procure] the goods to support the stores. Loehmann’s was the best as a regional company. But after overextending, Glave added, “Their footprint has probably shrunk more than they needed to be more profitable. In addition, there has been a lot of non-price competition.

Tiger Capital also led the liquidation of the historic flagship of Lord & Taylor on Manhattan’s Fifth Avenue. “I was in this building for four months. It was a very interesting sale,” Glave said. From other L&T sites, “the goal was to sell the majority of goods cleared for L&T. We received over 800 truckloads of clearance goods that needed to be tagged, hung and displayed – 10 truckloads a day for almost three months,” Glave said. “The logistics of getting so many trucks from the distribution center to the flagship was the determining factor in the length of the transaction.

“When customers came looking for a regular product, this one wasn’t there. In a clearance sale, you also expect to find regular merchandise. Lord & Taylor’s clearance merchandise wasn’t shoddy, but lacked depth in size. Some tops, for example, had many large sizes but few small sizes. There was too much odds and ends,” recalls Glave.

Although liquidations are the “bread and butter” of Tiger Capital, they can be bittersweet. “Lord & Taylor had a great staff,” Glave said, noting that Tiger Capital also liquidated L&T stores in Oak Brook, Ill., and Eatontown, NJ. “You get to know these people when you work in their stores. Many of them are dedicated to the business. I never blame the people in the stores,” for the end result. “They work as hard as they can to sell.”

Tiger Capital also liquidated Barneys New York, as part of a joint venture. “There was poor management within the business, and the rents and payroll were astronomical for these stores,” Glave said, giving his opinion on why Barneys failed. “When they started to run out of funding, stores emptied, sales started to go down. Barneys wanted very exclusive high-end brands, but they were having a hard time getting that product. Barneys also had a bigger customer base. They had to attract young people, Millennials.

“They had a great name, but needed a fresher overhaul. They had cutting-edge fashion in some areas, but also men’s suits, which don’t sell as much anymore. They had a lot of real estate without a lot of product. Barneys has become very light on merchandise. I think someone new with really deep pockets who wanted to try might have saved the concept.… I wouldn’t blame the owner. They have acquired a property worth a fortune.

When Tiger Capital installed the store closing signs, the general public entered, while regular Barneys customers generally stayed home. “We expanded the store with more products that we bought from their suppliers and we bought things that would fit into the sales. I don’t think the increase hurt the sales. It did a lot We did very well with the jewelry.

According to Glave, closeouts require expertise that retailers themselves don’t necessarily have. “Some retailers don’t have the data collection on the back-end to be able to produce BI [business intelligence] reports. Additionally, some retailers fall in love with their merchandise and continue to slowly sell the product in stores because they feel it must be worth more than a liquidator can sell it for.

When asked if it was difficult to manage a liquidation, Glave replied, “It’s about knowing the product and getting the sale started with signs and encouraging employees to stay. Once we put the panels up, we see a huge increase in sales, which for Barneys was perhaps the opposite. It was a learning experience, when you get the signs and offer the deals there is a beginning and an end. It’s usually two or three months and you’re done. We always try to make store staff understand that if customers see something that’s 20% off today, they need to understand that they’re taking a risk by waiting to come back to see if it’s 30% off. off and hasn’t been sold yet.

“We do a thorough analysis to know when to change the discount,” Glave said, explaining that this includes determining how popular an item is, how well it sells in-store and at competing stores, and whether it’s in season or out of 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 that goes into this. You don’t just start at 10% off and then 20 and then 30. Usually when we come to a company I marvel when they say you get better margins than us.

Last January, Glave was promoted from director of field financial operations to general manager. During his 23-year career at tiger and predecessor company The Nassi Group, she managed numerous selective store closing sales and chain-wide liquidations, serving as a senior financial analyst and operations specialist, responsible for financial modeling, monitoring and analysis of daily sales data and on-site management of tigerfield supervisors.

“Gail is at the forefront of liquidation analysis,” said tiger Chief Operating Officer Michael McGrail. “His leadership role in the development tigerInsight Analytics relies on its ability to analyze data, at the most granular level, to find insights that improve our customers’ operations and sales. On top of that, his store-level expertise in retail operations, including merchandising and discount modeling, is second to none. It brings a valuable “trader perspective” to all tiger projects.”

According to its website, Tiger values ​​over $30 billion in assets and facilitates the sale of over $1 billion in unwanted assets each year.

“There’s a lot of four-wall analysis going on across all businesses right now to weed out underperforming stores,” Glave said. Yet the coronavirus makes it more difficult to clearly read the viability of stores. “You might have a store with a history of really good results. Right now it’s just not producing, so are you taking the opportunity to get out of this building or are you betting on staying there? There’s a lot of analysis in there. The companies study the rental conditions. Chapter 11 stores are renegotiating with owners and may decide to stay in certain locations if [the landlord] aid. Everyone does it. You need to look at the store’s history and determine if it was just making money or making a lot of money, or is there something that can be done to help it make money. ‘money ? »

Glave thinks this year won’t see as many store liquidations as last year. “When we get back to normal, we could see a huge retail rush,” she said. “There is still a big market for people who want to touch and feel the product before buying it.”

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