GB Merchant Partners Sells Spencer Gifts

Press Release
BOSTON, MA – April 21, 2007 – GB Merchant Partners, the investment management affiliate of Gordon Brothers Group, today announced the sale of Spencer Gifts Holdings, Inc. to ACON Investments. The Company will continue to be operated by its current management team, which is led by CEO Steven Silverstein, the former President of Linens 'n Things. As part of the transaction, management has increased its current ownership position in the company while GB Merchant Partners will retain a minority stake in the business.

“We have enjoyed working with Steven Silverstein, Ike Silvera and the entire Spencer Gifts management team to build a fantastic company,” stated Mark Schwartz, President and Chief Executive Officer of Gordon Brothers Group. “We look forward to maintaining a strong relationship with them during the Company’s next phase of development.”

In 2003, GB Merchant Partners purchased Spencer Gifts from Vivendi Universal Entertainment. With an improved capital structure in place, GB Merchant Partners then tapped the 100-plus year retail and operational expertise of its parent company, Gordon Brothers Group, to significantly improve Spencer’s management team and realign the Company’s operations.

“We always believed that Spencer Gifts occupied a unique space in the specialty gift sector,” commented Matthew Kahn, Managing Director of GB Merchant Partners “We uncovered value by capitalizing on the Company’s strong brand awareness and high level of consistent foot traffic while infusing the Company with a strong management team and also eliminating under-performing divisions.”

During GB Merchant Partners’ ownership, the profitability of the Company’s two distinct retail concepts, Spencer Gifts and Spirit Halloween, improved considerably. Spencer Gifts, which targets Generation Y consumers and specializes in unique, humorous and innovative products including accessories, décor items and gifts, now operates in 600 mall-based stores throughout the United States, Canada, Puerto Rico and online. Spirit Halloween, which operates in the United States and online, has grown to become the nation’s leading seasonal Halloween retailer, expanding its store count to over 500 in 2007. Spirit carries the widest and deepest selection of Halloween-related products including costumes, wigs, masks, accessories and seasonal décor in stores that are typically open for just two months each fall.

About GB Merchant Partners
GB Merchant Partners, LLC (“GBMP”) is the investment management affiliate of Gordon Brothers Group, with over $500 million of capital under management. The firm focuses on private equity, structured loan and secondary debt investments. Private equity investments are made through GBMP’s 1903 Equity Fund, which takes majority and minority equity positions in middle-market retail and consumer products companies. GB Merchant Partners leverages Gordon Brothers Group’s consumer products and retail expertise, and prefers to partner with management teams to complete a buyout, fund growth or facilitate a restructuring. Current private equity portfolio companies include: Grafton Fraser, Things Remembered, Andrew Marc, Toys R Us, Dollarama, Laura Secord and Amscan. To learn more about GBMP please visit (www.gbmerchantpartners.com).