GB Merchant Partners and Gordon Brothers Group Close on $320 Million Private Equity Fund

Press Release
BOSTON, MA – [January 18, 2007] – GB Merchant Partners, LLC, the private equity affiliate of Boston-based Gordon Brothers Group, announced today its second and final closing of the 1903 Equity Fund, L.P., a $320 million private equity fund that will make control and minority investments in middle market retail and consumer products companies.

GB Merchant Partners, which has been successfully investing private equity capital for nearly a decade, will continue partnering with strong management teams to invest in retail and consumer products businesses with a competitive product or channel of distribution that have reached an inflection point in their development. The firm’s goal is to invest $15 - 50 million in each transaction and build value by capitalizing on the industry knowledge, contacts and expertise of Gordon Brothers Group. The collective expertise of Gordon Brothers Group includes over 250 professionals and 200 field consultants worldwide, including former retail CEOs, CFOs, operators and merchants.

“We are very pleased to have closed on our first, formal private equity fund,” commented Mark Schwartz, Managing Principal of GB Merchant Partners and Chief Executive Officer of Gordon Brothers Group. “The fact that we significantly exceeded our initial target of $250 million is a testament to the value institutional investors place on Gordon Brothers Group’s track record of value creation and the Fund’s overall investment strategy.”

Mr. Schwartz, along with Matthew Kahn and James Dworkin, comprise the Fund’s senior principals and represent half a century of private equity experience. Other members of the investment team include Michael Frieze, Jeffrey Bloomberg, Michael Rand, Scott Strasser, Tobias Nanda and Brian Cooper. To date, GB Merchant Partners has made 11 principal equity investments in 10 companies. Current portfolio companies include Things Remembered (the nation’s largest personalized gift chain with 650 stores in 48 states), Andrew Marc (a branded outerwear, handbag and footwear designer and wholesaler), Spencer Gifts (a 700-store gifts/novelty retailer), and Laura Secord (a leading Canadian retailer and wholesaler of chocolate). Minority investments include Dollarama (the leading Canadian, dollar-store retailer), Toys “R” Us (the leading US toy retailer) and Amscan/Party City (the leading party goods wholesaler and retailer).

Gordon Brothers Group was advised by the law firm of Ropes & Gray as well as BerchWood Partners, a placement agent focused on assisting funds such as 1903 Equity Fund raise investment capital.

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About GB Merchant Partners
GB Merchant Partners (www.gbmerchantpartners.com), the investment management affiliate of Gordon Brothers Group with over $500 million of capital under management, focuses on private equity, structured loan and secondary debt investments. Equity investments are made through the 1903 Equity Fund, which takes majority and minority equity positions in middle-market retail and consumer products companies. Debt financings, typically structured as junior secured, “Tranche B” or enterprise value loans that range from $10 to $50 million, are made to middle-market companies in the distribution, wholesale, industrial, retail, consumer products and real estate sectors.

About Gordon Brothers Group
Founded in 1903, Gordon Brothers Group, LLC (www.gordonbrothers.com) is an advisory, restructuring and investment firm specializing in the retail, consumer products, real estate and industrial sectors. The firm provides a wide variety of services to companies at times of growth and restructuring. Gordon Brothers Group capabilities include asset valuations, dispositions and appraisals, real estate consulting and acquisitions, retail store operations, lending, equity investments, restructuring and advisory services. The firm has unparalleled expertise in assisting healthy and distressed companies in maximizing the value of under-performing assets and expanding operations through new products and distribution channels. Gordon Brothers Group resources include over 250 professionals and 200 field experts, including former CEOs, CFOs, merchants and operations executives in offices worldwide. During the past three years, Gordon Brothers Group has appraised over $100 billion of assets, managed more than 7,000 stores, sold more than $10 billion of inventory and restructured or sold over 120 million square feet of retail space.

Media Contact:
Alex Stanton
Stanton Crenshaw Communications
[email protected]
(212) 780-1900