$56 million offer could keep up to 50 Brookstone stores openBy MIKE COTE
New Hampshire Union Leader
September 07. 2018 10:00PM
MERRIMACK — The company known for such novelties as the $60 Gronkball Light-up Bluetooth Speaker Football and the $900 Rock & Recline Shiatsu Massage Chair could still have a future in shopping malls thanks to a buyout offer worth more than $56 million.
Brookstone Company Inc. signed a letter of intent with Bluestar Alliance LLC to acquire its brand assets and to serve as a “stalking horse” bidder in its Chapter 11 restructuring, the Merrimack company announced Friday night.
The Bankruptcy Court for the District of Delaware on Friday approved Bluestar as the stalking horse bidder for the company’s Sept. 26 auction. Brookstone said the improved offer includes an option for Bluestar to select a transaction that would keep up to 50 existing Brookstone stores open. Bluestar would pay a $400,000 penalty if it does not select the option or selects it and fails to keep at least 30 stores open, Brookstone said.
“This agreement with Bluestar is an indication of the value of Brookstone’s cherished brand, and we are particularly encouraged by Bluestar’s enthusiasm to seriously consider a bid that includes operating Brookstone retail outlets,” CEO Piau Phang Foo in a statement. “We continue to see interest in our company from multiple potential buyers.”
The new offer is worth approximately $56.35 million, comprising $50.45 million in cash and at least $5.9 million of value in the form of readily salable inventory, Brookstone said, adding that it substantially improves upon Bluestar’s earlier $43 million offer.
The letter of intent with Bluestar supersedes the $35 million proposal made by Authentic Brands Group, the company said. The deadline to submit competing bids is Sept. 20.
Brookstone, founded in 1965, is a developer and retailer of wellness, entertainment, and travel products. The company continues to operate 34 retail locations in airports throughout the U.S., online at Brookstone.com and through other retailers.
With the future of the company unclear, Brookstone warned its 90 Merrimack employees that they could be losing their jobs in a few weeks.
“Because of this uncertainty and in the interest of transparency, we have voluntarily provided WARN (Worker Adjustment and Retraining) Act notices to all full-time employees at our home office in Merrimack,” Foo said in a statement on Thursday.
The federal WARN Act requires companies with at least 100 employees to give those workers a 60-day advance notice of impending layoffs.
Last month, Brookstone announced that it filed Chapter 11 bankruptcy and had begun the process to close the company’s remaining 101 mall locations. The company said it was seeking a buyer and closing its mall stores “following continued deterioration of traditional retail mall traffic.”