Sam's Wines wraps up equity-firm deal
Chicago Tribune
Sale of 80% stake gives liquor retailer capital for expansion
Family control of Sam’s Wines and Spirits has ended with a deal announced Friday to sell 80 percent of the third-generation business to a Chicago private-equity firm.
The transaction provides Sam’s with access to capital that would allow it to expand at a time when Internet sales are putting pressure on wine-and-spirits chain stores.
Gregory Purcell, managing partner and founder of Arbor Investments, the private-equity firm, is “evaluating” how to take advantage of Sam’s brand name, but said it won’t take any big steps for three to six months. Adding stores and expanding the Web business are both possibilities, he said.
“We’ve got a pretty strong history of growing niche businesses like this,” Purcell said.
Terms weren’t disclosed.
Arbor purchased its majority position from the Rosen family, which started the business as a saloon in 1946.
Brian Rosen, grandson of founder Sam Rosen, retains a 20 percent stake and becomes president. Sam’s is now poised to grow, he said.
“The demographics of the wine and spirits drinker is growing,” he said. “There are more people drinking wine and sprits than ever before.”
The deal, which has been in the works for two years, gives Arbor a brand name recognized from Napa Valley to Bordeaux.
“This is just a great opportunity,” said Purcell. “The uniqueness of this retailer is unparalleled. You’re not going to find a wine business in the city that has a deeper knowledge, and everyone in Chicago takes that for granted.”
A disagreement in the Rosen family over the future direction of Sam’s led to the sale.
Darryl Rosen, who ran the business for the past decade and had been Sam’s president until recently, said Friday he wasn’t interested in working for an outside owner while his brother, Brian, wanted to expand.
“We got to three stores and at that point you need to bring in outside help, whether capital or management to expand,” said Darryl Rosen. “It’s not the direction I wanted to go in. When you’re beholden to people who own the business, there’s a different level of expectation and it just wasn’t something I was interested in anymore.”
So Darryl Rosen left the business to found Grand Slam Customer Service LLC, a speaking and consulting firm focused on customer service.
Darryl and Brian Rosen bought the business from their father, Fred, in 2003. Fred Rosen, the second-generation owner, took over the business from his father and built the store into a Lincoln Park fixture with global buying power.
The two brothers added stores in Downers Grove and Highland Park. But Sam’s Lincoln Park flagship still generates the bulk of the company’s estimated $65 million in sales.
Fred is still involved in the business and a regular fixture in the stores, said Brian Rosen. Fred Rosen couldn’t be reached for comment.
The family tried at least once before, unsuccessfully, to sell the business in the late 1990s to California liquor store chain Beverages & More.
Purcell founded Arbor in 1999, after a career at closely held Reyes Holdings LLC, where he was head of mergers and acquisitions for the Rosemont-based food and beverage distributor. Arbor’s portfolio of companies includes Addison-based Great Kitchens, Melrose Park-based Dale and Gage Foods LLC and Montross, Va.-based Northern Neck Coca-Cola Bottling Inc.
The firm specializes in the food and beverage industries and has $170 million of equity capital through two investment partnerships, its Web site says. The Sam’s deal is its first investment in a spirits company.
smjones@tribune.com
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