According to Finish Line's just-released 10K, Finish Line will remain majority owner of Running Specialty with a 51 percent stake following its strategic investment with Gart Capital Partners. As part of the transaction, GCPI issued Finish Line a $4.0 million related-party promissory note.
The note calls for interest payments based in
part on a fixed rate and in part on participation in the value of other
investments held by GCPI.
On March 30, The Finish Line, Inc. announced that Gart Capital Partners (GCP) was making a $10 million strategic investment in Finish Line's Running Specialty Group with the goal of creating the nation's single largest operator within the growing specialty running business. Finish Line indicated that it remained majority owner of the Running Specialty Group, but the stake was not revealed.
GCP is an equity investment partnership that has a proven track record of successfully executing specialty retail rollups, including a 12-year joint venture with Vail Resorts, Inc. that involved more than 150 ski-related shops generating $200 million in annual sales. The headquarters of the Running Specialty Group will be relocated to Denver, where GCP will manage all day-to-day operations as well as merchandising and the acquisition of additional running operators from its home base there. Finish Line will continue to leverage its strengths as a leading omni-channel retailer, providing direct logistics, marketing and IT support along with digital expertise. This spring, the Running Specialty Group will launch Run.com, a digital experience for runners that will be the segment’s first to marry content, community and commerce.
The Running Company segment ended up its fiscal year ended March 3 with 19 stores, including 18 acquired and one new store opening. The Running Specialty stores, which average 3,000 square feet, were
acquired by Finish Lin on August 31, 2011 when it was an 18-store
chain. Finish Line paid $8.5 million for the purchase.
