Genesis Direct, Secaucus, NJ, has expanded its catalog roster to 30 and its burgeoning children's catalog unit to seven by acquiring Biobottoms, Petaluma, CA.
The catalog of children's clothing made from natural materials was acquired from Diplomat Corp., Stony Point, NY, for $2.3 million in cash and notes and $5.7 million in assumption of liabilities.
Biobottoms, founded in 1981, bears the name of its original product, a diaper cover made of a breathable, felted lambswool that reduces the chance of diaper rash. Since then, the company has expanded to offer 58 pages of infants' and children's clothing. Last year, the Biobottoms catalog mailed 9 million copies, averaged a 3 percent return rate and reported $17 million in revenues, said David Stetson, senior vice president at European Community Capital Ltd., an investment research company that reports on Diplomat.
Genesis Direct officials see Biobottoms as being synergistic to its other children's brands.
“We believe Biobottoms will thrive in our environment as a platform for our customers' children's clothing needs,” said Jim Abrams, vice president of Genesis Direct's children core business unit.
The sale of Biobottoms underscores a shift from the children's to the women's market for Diplomat, which acquired the Lew Magram and Brownstone Holdings women's clothing catalog businesses in the past year.
“This transaction will focus our efforts and resources on developing the direct mail apparel business directed at the 20-and-up age group,” said Jonathan Rosenberg, president of Diplomat. “We believe that focusing on this age group will enhance Diplomat's return on investment per acquired customer, as the lifetime value is greater as compared to the children's market, thus enhancing our shareholder value.”
Diplomat is retaining one part of its children's business; it will continue to manufacture and distribute infant accessories under the Ecology Kids brand, also located in Stony Point.
The sale also contains Diplomat within a more manageable region — Biobottoms was its only subsidiary on the West Coast.
“The company wants to focus its energy and geography in the same area,” said Stetson.
Officials at Genesis Direct and Biobottoms could not be reached for comment.
