Maurices
operational expertise + financial acumen =
|
Apparel retail
USA
May 2019
Sector:
Country:
Fund Investment Date:
Gross Turnover at Acquisition (incl. franchising):
$1 billion
Website:
OpCapita Executives:
Jeff Kirwan, David Jacobs & ChrisMcDermott
Key Facts
Business
Founded in 1931 by Maurice Labovitz, Maurices is an American women's apparel retailer based in Duluth, Minnesota. The chain targets women aged 25-45 with value apparel and accessories through a network of c. 900 stores across the U.S. and Canada, and its website maurices.com. Maurices is positioned as a "hometown retailer," with nearly 70% of its stores located in small towns where it maintains high brand recognition.


Market
The U.S. retail sector has faced difficult headwinds in recent years, with declining store traffic, as well as store closures and bankruptcies, all compounded by accelerated customer migration online. Within the apparel retail market, value-oriented retailers with sharper price points have significantly outperformed higher price point competitors.

The Covid-19 pandemic brought both disruption and innovation to the apparel industry. Due to extended store closures, a step-change in ecommerce penetration growth occurred nearly overnight, a behaviour shift that is expected to continue. The store closures forced many retailers without meaningful ecommerce offerings to either restructure or close altogether, removing capacity from the market. Continuing global supply disruptions favour retailers with agile and reactive supply chains and strong supplier partnership.

Since early 2021, U.S. retail has emerged on a more solid footing, with many apparel retailers seeing a return of meaningful growth due to the elimination of excess capacity, enhanced digital and in-store capabilities, and a recovering U.S. economy.


Strategy
When Maurice Labovitz founded the company in 1931 during the Great Depression, he recognized an opportunity to provide affordable style without sacrificing quality and service. Ninety years later, this hometown approach continues to be a winning formula, as evidenced by the nearly six million and growing customer base who purchase from Maurices every year.

OpCapita believes that this unique hometown positioning is a significant differentiator, needing a well-priced and relevant product assortment targeting a re-engaged omnichannel customer. OpCapita identified multiple areas in which disciplined operational focus could drive a material increase in profitability, including improvements in the company's sourcing strategy, a new focus on merchandise planning disciplines and the development of omnichannel capabilities.


Achievements
Since our investment, we have:
  • Returned store sales to growth, grown online sales by nearly 100% and more than doubled company EBITDA
  • Significantly augmented the breadth and depth of the senior management team
  • Developed an agile in-house sourcing function and strategic sourcing partnerships
  • Improved merchandise planning disciplines
  • Significantly enhanced and grown the loyalty and private label credit card programs
  • Ensured the safe separation Maurices' IT systems and supply chain infrastructure from former parent Ascena
  • Refinanced the capital structure as part of a dividend recap
900
stores
$1bn
revenue
5.7 M
active customers