Gordon Brothers Group Acquires Spencer Gifts

Press Release

Boston, MA and New York, NY — An investor group led by Gordon Brothers Group, LLC and Palladin Capital Group, Inc. announced today that it has acquired Spencer Gifts, LLC, from Vivendi Universal Entertainment, LLLP. With more than $400 million in annualized revenue, Spencer Gifts operates over 700 specialty gift and Halloween stores in the United States, Canada and the United Kingdom under the Spencer Gifts, Dapy, Glow and Spirit brand names. The Company is headquartered in Egg Harbor Township, NJ.

Gordon Brothers Group, a Boston-based retail finance and asset management firm and Palladin Capital Group a New York based merchant banking firm, structured the transaction through their new joint venture GB Palladin Capital, LLC. Other investors included New England Development, one of the premier real estate development and management companies in the Northeast. The terms of the transaction were not disclosed.

“Spencer Gifts is an established mall-based retailer with a strong brand name, loyal consumer following and dedicated professional work force,” commented Mike Frieze, CEO of Gordon Brothers Group. “We look forward to using our merchandising, operational and investment expertise to strengthen Spencer’s position as a leading specialty gift resource.

Mark Schwartz, the President of Gordon Brothers Group stated, “We are confident that the additional focus and capital provided by Gordon Brothers Group and Palladin, combined with new management leadership, will help Spencer continue its 55 year history of solid growth.”

Mr. Schwartz also announced that Steven Silverstein has joined Spencer Gifts as President and CEO. Prior to joining the Spencer team, Mr. Silverstein spent eleven years at Linens ‘n Things, Inc., most recently as President. While there, he was instrumental in growing the company from $180 million in sales to over $2.1 billion and from just three stores to nearly 400 in the U.S. and Canada. Prior to Linens ‘n Things, Mr. Silverstein was the Merchandising Vice President of Home Textiles for Bloomingdale’s.

“We are very pleased that Steven has accepted this important leadership role at Spencer Gifts. His in-depth knowledge of merchandising and operations, coupled with his high energy level and consumer-driven marketing strategies will be invaluable to the current management team,” said Mr. Schwartz, who is also the President of Palladin Capital Group as well as Managing Principal of GB Palladin.

"I am thrilled to be at Spencer Gifts,” said Mr. Silverstein. “Spencer’s mission has been to create outrageous fun by providing the best assortment of irreverent and trendy merchandise and gifts. I believe in this concept and am confident that we can build on the Company’s strong name and market position to take Spencer to the next level. I am looking forward to harnessing the input and support of both the Spencer associates and my new partners at Gordon Brothers Group and Palladin to expand both sales and profitability.”

About GB Palladin
GB Palladin is a joint venture that brings together Gordon Brothers Group’s 100 years of hands-on merchandising and operational experience with Palladin Capital Group’s unique investment expertise within the consumer products sector. GB Palladin takes a hands-on approach to investing, using its capital, industry knowledge and expertise to help companies and managers achieve their goals. The principals of GB Palladin have served as active investors, directors and executives in numerous public and private corporations. As such, they are in a unique position to work with managers on growth or brand repositioning through improved merchandising, more efficient operations and financial management. GB Palladin has leveraged this expertise to provide many businesses with junior secured loans or equity investments. Recent examples include Restoration Hardware, Inc. (NASDAQ: RSTO), an upscale home furnishings and gifts retailer; Party America, a big box party supply retailer; and Factory 2-U Stores (NASDAQ: FTUS) a discount apparel store.

About Vivendi Universal Entertainment, LLLP
Vivendi UNIVERSAL Entertainment (VUE) (www.universalstudios.com) is a diversified international entertainment company engaged in production and distribution of theatrical, television and home video products; operation of theme parks around the world; merchandising of a wide variety of entertainment-related consumer products; and retailing. VUE is the U.S.-based film, television and recreation entity of Vivendi Universal, a global media and communications company.