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North Castle Partners, a private equity firm focused on investments in consumer product and service businesses, announced that Elizabeth Arden, Inc. has made an investment in Red Door Spa Holdings, a North Castle portfolio company that is the operator of the Elizabeth Arden Red Door Spas and the Mario Tricoci Hair Salons.
Elizabeth Arden, Inc. licenses the trademarks for the Elizabeth Arden and Red Door brand names to Red Door Spa Holdings, the owner and operator of the Elizabeth Arden Red Door Spas. Elizabeth Arden, Inc. has partnered with J.H. Anderson Holdings, Inc. and its principal John Anderson, to collectively invest $12 million for a minority interest in Red Door Spa Holdings. In addition, Elizabeth Arden, Inc. and J.H. Anderson Holdings have an option to acquire the remaining interest in Red Door Spa Holdings. The investment will be recorded as a minority investment by the company and, therefore, it will not have a material impact on the company’s financial results.
E. Scott Beattie, chairman, president and CEO of Elizabeth Arden, Inc., commented, “Our intent in partnering with John Anderson and North Castle Partners is to accelerate the growth of the spa business in parallel with the growth of the Elizabeth Arden brand and the Elizabeth Arden brand repositioning. The collaboration between Elizabeth Arden, Inc., John Anderson and North Castle brings the relevant product, operational management and financial skills to maximize the growth potential and profitability of the Red Door Spa business. The equity of the Elizabeth Arden brand is rooted in its Red Door Spa heritage. We intend to leverage this unique association to drive both Elizabeth Arden product sales and the Red Door Spa business.”
John Anderson noted, “As one of the most highly recognized names in the nearly $50 billion global spa industry, I look forward to leveraging this brand name in expanding the business.”
Alison Minter, North Castle Partners managing director, stated, “We believe the opportunity to align our economic interests and to leverage Elizabeth Arden, Inc’s. corporate resources and marketing capabilities, particularly in expanding product sales, will strengthen Red Door Spa Holdings’ leadership position in the day spa market. This transaction is another example of North Castle partnering with management teams to build high quality brands that are of strategic value to leading consumer product companies.”
Red Door Spa Holdings currently owns and operates 31 Red Door Spas in freestanding locations and upscale resort and hotel properties in the United States and 18 Mario Tricoci Hair Salons in the Chicago metro area and had combined revenue of approximately $150 million in fiscal 2011.