A.C. Moore, the Berlin, Camden County-based arts and crafts store chain that has struggled through the business slump, has been sold to an affiliate of art-supply distributor Sbar's, just up the road in Moorestown, for $1.60 a share, or around $41 million.
That's a premium to the recent price of around $1, but a small fraction of Moore's previous high of over $30 in 2005, and $5 just two years ago. The chain competes with national chain Michael's and local outlets.
Sbar's boss Pepe Piperno wouldn't say what this means for Moore's 100-plus stores or headquarters workers at its 767,000 square foot Berlin, Camden County warehouse and office. Deal statement here.
"Investors in this company are thinking this is the best thing, given the lack of cash at the company," Mark Mulholland, who runs the $55 million Matthew 25 fund in Jenkintown, told me. He said the company's headquarters alone is worth at least $30 million at recent South Jersey real estate prices. He said he owned the stock in the mid-2000s but sold after founder Jack Parker left the company in 2006. "It was cheap, but it was thinly traded."
The board first brought in Office Depot executive Richard Lepley to run the business, then Joseph Jeffries in 2010, and the chain expanded up and down the I-95 corridor, but sales didn't keep pace and the stock price sank below the value of the company's inventory, as Moore "burned through" its cash, Mulholland said. Moore said in February it was considering a sale.
Moore sales peaked in 2006 at $589 million and have declined each year since. The company has lost over $25 million/year in each of the past three years. Janney Montgomery Scott, which had recommended the stock to investors during its profitable years, advised the company on its sale at a fraction of its old price.
Major investors include New York-based Glenhill Advisors LLC and the Dimensional ande Paradigm fund groups. Boss is chief executive Joseph J. Jeffries; chairman is Michael Joyce; board includes Joseph F. Coradino, a top executive at Ron Rubin's Preit-Rubin Inc., the biggest shopping-mall landlord based in Philadelphia.