A new link in jewelry chain: Investment firm controls Ross-Simons
Wednesday, July 26th 2000, 12:00 am
By: News On 6
Ross-Simons, Rhode Island's well-known, family-owned jewelry chain with 1999 sales of $250 million, has sold control of the company to a private investment firm in the hopes of expanding.
The Cranston company said yesterday that Freeman Spogli & Co., a Los Angeles-based investment firm that specializes in consumer-related businesses has obtained a majority interest in Ross-Simons, which includes retail, Internet and catalog businesses.
Other details weren't disclosed, and Ross-Simons didn't say how much Freeman Spogli paid for its majority share of the company.
Darrell Ross, the jewelry company's chairman and chief executive, said the investment will put Ross-Simons on the fast track for continued growth in all three sales areas.
"The hope and expectation is that with the backing of Freeman Spogli, we will be able to accelerate our growth," Ross said.
Ross will remain the single largest individual shareholder -- although with a minority of total shares -- and will also stay on as chairman and chief executive.
His brother, Mark, also owns a stake in the privately-held company and will remain involved with the firm.
No personnel or management changes are planned, Darrell Ross said yesterday, and Freeman Spogli won't have a role in day-to-day operations.
"Freeman Spogli is an investor because they like what they see at Ross-Simons, and they don't plan to tinker with anything," Ross said.
He said, however, that Freeman Spogli has access to "capital, investments and expertise that cut across retail, direct marketing and Internet."
He expects, he said, that the deal will lead to additional investments in Ross-Simons' businesses, as well "alliances, combinations and partnerships" that will spur growth.
Ross-Simons sells jewelry, gifts and collectibles. The company is projecting that sales will increase by 16 percent to $290 million this year.
There are 11 Ross-Simons stores in eight states. Locally, there are stores in Barrington, Warwick and Providence.
The Ross-Simons group of companies also includes Gearys of Beverly Hills, a luxury jewelry and giftware store.
Ross-Simons employs about 800 nationwide, including 500 in Rhode Island.
Both Ross-Simons and Gearys have catalog and Internet businesses.
Earlier this year, Ross said the company plans to open two to four new stores a year in major metropolitan markets.
The new stores are just outside Chicago and Washington.
This year, Ross-Simons is projecting Internet sales to account for about 10 percent of total sales, as catalog sales slow from 75 percent of total sales to 70 percent. Retail sales are expected to remain about 20 percent.
Recently, Freeman Spogli has been investing in Internet retail businesses, such as MVP.com, the online sporting goods site launched by Michael Jordan, John Elway and Wayne Gretzky; Greenlight.com, an Internet car dealership; PartsAmerica.com, which sells auto parts over the Internet; and Miadora, an online jeweler.
The company also holds stakes in The Pantry, a convenience store chain in the Southeast; and AFC Enterprises, which owns Church's Chicken, Popeye's Chicken & Biscuits, Seattle's Best Coffee and Cinnabon.
Since 1983, Freeman Spogli has invested more than $1.7 billion in 33 companies.
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