The Container Store's CEO Kip Tindell and Chairman Garrett Boone, announced that the company will explore strategic alternatives for the 29-year-old storage and organization retailer, including a potential sale of the company. Tindell called the move "a new path toward continued growth, profitability, market leadership and preservation of our beloved culture and customer service.
The company will launch a formal process after Boone's family expressed interest in selling a large portion of their leading stake in the company.
"The Container Store has been a huge part of our family for nearly 30 years, said Boone. "Due to strong market conditions for retail mergers and acquisitions, we felt the timing was right to partner with Kip and our management team in securing the long-term future for the company.
Tindell and Boone announced the news to the company, including employees at their subsidiary company in Sweden, elfa®, the premier manufacturer of wire shelving and drawer systems and the company's best selling product. The announcement was conducted in a series of live meetings with employees at its headquarters and via conference call with key Directors and Managers across the country, as well as through a written companywide memo.
"We have enjoyed tremendous success in our first three decades, said Tindell. "We are confident the success of our store concept, our exceptional brand equity, our matchless management team and our promising growth opportunity will attract significant buyer interest and top-of-market valuation.
The decision comes as the company soon reaches the end of a successful fiscal 2006 in which its sales are expected to reach close to $500 million, a figure that has steadily grown at 15-20 percent per year. The company was founded in 1978 in Dallas by Boone, Tindell and Dallas architect John Mullen. It now has 38 stores in 17 markets, with three new stores planned for 2007 and as many as six in 2008.
Tindell cited the company's strong brand and market position as an opportunity to forge an unusual deal that ensures continuity of management and protects the company's unique character and its acclaimed culture, which has earned high rankings on FORTUNE magazine's list of "100 Best Companies To Work For for eight years running.
"We will seek a path that retains the current management team and gives them continued operational control of the business, Tindell said, calling the team "one of the most admired and sought after in our industry.
"Our success is built on a unique culture, concept and brand " and we're looking for a transaction that will be just as ground-breaking: one that will allow us to run the business exactly as we do today, Tindell said. "The Container Store will remain every bit as yummy, quirky and exciting and every bit as true to its values, philosophy and core concepts as we are right now.
By achieving maximum return for its shareholders while preserving its core principles and way of doing business, The Container Store will score a win for its investors, customers and employees.
"Our extraordinary employees have turned the vision of this company into a one-of-a-kind place to shop and work. Further strengthening our unique culture and business model is critical to our commitment to be the best retail store in America, as well as the best place to work, said Tindell.
Additionally, at the Board Meeting, Boone requested that Tindell be named Co-Chairman in addition to his CEO title. The move was unanimously approved.
said Boone. "We will work closely together to see that this transaction is successfully completed and that it's something that's beneficial for everyone involved with The Container Store " each and every stakeholder.
In preparation for this decision to explore strategic alternatives, company management recently hired JPMorgan as its financial advisor and Cravath, Swaine & Moore LLP as legal advisor.
"We're fortunate to be working with a world-class team of advisors who are the best in the country at what they do, said Tindell.
About The Container Store:
The Container Store currently has 38 locations across the country. In 2007, the retailer will open its first store in Missouri (St. Louis' Brentwood Square) on March 3, its second in Denver (Cherry Creek), on Sept. 15 and its first in the greater Philadelphia market area (Cherry Hill, NJ) on Nov. 3. The Container Store offers free closet design services every day in its stores and online using elfa, the premiere shelving and drawer system. Elfa International AB, based in Västervik, Sweden, is a wholly-owned subsidiary of The Container Store. Visit www.containerstore.com for more information about store locations, the product collection and services offered. The Container Store has been named to the top of FORTUNE magazine's annual list of the "100 Best Companies to Work For for the past eight years. Sales for fiscal year 2006 are projected at an excess of $500 million. The Container Store is privately held.