Financial Solutions for the Direct Marketing Industry

Financial Solutions for the Direct Marketing Industry PO Box 149 • New Vernon, NJ 07976 • Tel 973.441.2062 • Cell 973.477.3389 • Fax 973.270.2403

fred@anderson-direct.com • www.anderson-direct.com

ANDERSONdirect is an M&A and consulting firm focusing on the ecommerce and catalog

worlds of direct marketing. Taking advantage of over 40 years of experience of its founder

and president - Fred Anderson – the firm specializes in both Mergers & Acquisitions and

due diligence.

Our services include:

Mergers & Acquisitions

(buy side & sell side)

Due Diligence

Matchback Analysis

Ecommerce Metrics

Social Media Analysis

Cash Flow Projections

Benchmarking

Business Valuation

RECENT ENGAGEMENTS

I. MERGERS & ACQUISITIONS

Currently representing both sellers and buyers seeking transactions in pet products; home

décor; health and wellness; hobbies and crafts; awards and recognition; gourmet foods;

garden and patio; gifts; bikes; women’s apparel and plus-size apparel; consumer

turnarounds; outdoor furniture; licensed apparel; active wear and gear; and B-to-B .

Among transactions completed:

Sale of Reusit.com to affiliate of Plow and Hearth Sale of National Allergy Supply to affiliate of Royal Heritage Home Purchase of Country Supply, State Line Tack, Avian Bird, and Yardiac with total

revenues of approx. $75 million for Pets United, LLC Sale of $30 mil Monterrey Bay fashion catalog to Crosstown Traders Sale of Bas Bleu specialty book catalog to Universal Screen Arts Sale of Imagine The Challenge specialty toy cataloger to TMP, Inc. Purchase of Baseball Warehouse and Line Drive baseball by Matrix Group, Ltd. Purchase of the Jackson & Perkins horticultural business by affil. of Park Seed Sale of Touchstone home décor business to affiliate of Gardens Alive Sale of As We Change to Blyth,Inc. Purchase of Natural Healthy Concepts for Magazines.com Sale of Always For Me, Inc. to Waveland Investments LLC Purchase of West Coast Saving.com for Tribe Growth group LLC Sale of Chinaberry Inc to Nova Naturals Inc Sale of Sid Savage Auto Dealer Supply to affiliate of Rock Gate Partners LLC Sale of International Auto Parts to Centerline European Imports LLC Sale of Autosport to Walbro LLC Sale of Active Forever to ILP LLC Sale of Sensational Beginnings to CharityUSA.com LLC

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II. MAJOR DUE DILLIGENCE ASSIGNMENTS

Engaged by senior lender to Orchard Brands to advise on valuation, and credibility of

circ and response projections in one of the industry’s major restructurings

Engaged by Performance Bicycle, Inc. to identify key metrics for use in their sell-side

CIM – especially web-attribution; file attrition; and LTV.

Engaged by parent of Dr. Leonard’s to assist with preparation of sell-side CIM, focusing

on credibility of circulation and response projections and the forecast turnaround in

file growth.

Completed valuation analysis of Alloy Apparel.com

Retained by angel investor group to review investment opportunity in mobile app

start-up www.Gamechanger.io

Retained by Linsalata Capital to validate that its target’s recent dramatic growth in

ebitda was not influenced by any one-time, non-sustainable factors. Used detailed

comp segment analysis and proprietary merchandising evaluation techniques to

explain improvements in response rates.

Retained a second time by Linsalata to evaluate circ and demand projections at its

acquisition target – Overtons. Focused on validity of cross-channel forecasts and

catalog/web match-back attribution procedures.

Completed highly-focused due diligence assignment for Charming Shoppes on its

Crosstown Traders acquisition.

Performed detailed due diligence for purchaser of the Fairfield Mint collectibles

catalog. Identified circ segments with unacceptable customer acquisition costs and

developed circ plan for post-closing operations. Prepared financial projections for

lender.

III. OTHER M&A RELATED ASSIGNMENTS

Advised Foundation Investment Partners LLC on the direct marketing due diligence

portion of their bid for Ohio Travel Bag.

Managed the divestiture of the Popular Club division of Fingerhut. Prepared offering

memorandum; compiled data room; scripted management presentations; and

completed analyses to convince asset- based lender to finance the transaction.

Retained by major cataloger bidding at the Lillian Vernon Ch. 11 auction. Developed

circulation risk model to guide client in bidding.

Using our proprietary industry network, developed valuation comps for ecommerce B-

to-B site which were not publicly available. Coached management on other pre-sale

initiatives.

Prepared turnaround plan and assisted Giftcorp, Inc. in negotiating with suitors.

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IV. CATALOG / WEB OPERATIONS:

Re-engaged by Charming Shoppes to validate their Life Time Value analyses of house

brands.

Sought out best vendors, performed competitive evaluations, and obtained one of the

industry’s best revenue-share bids for Hanover Direct’s multi-million dollar

membership upsell program.

Retained by several clients to perform detailed Life Time Value (LTV) analyses of buyer

files – in one case serving as an expert witness for insurance valuation litigation

Engaged by new Orchard Brands board to advise on circulation and ebitda

optimization at its Haband division.

We were retained by Catalog Age top 100 apparel cataloger Knights Ltd to address

weaknesses in operating metrics and to improve its cash management process.

Implemented a backorder save program, a returns reduction program, and a payment

prioritization tool.

Retained by B & B Electronics as interim marketing head. Brought an analytical focus to

their marketing and circulation reporting and procedures.

Re-engaged by B & B a year later to advise on improving matchback procedures.

Retained by The Wine Enthusiast as interim CFO to validate its annual operating

budget.

Retained by Cherrybrook, Inc, a multi-channel pet products retailer, to advise both on

maximizing value for long-term exit strategy, and identifying and improving key

metrics for current operations.

Evaluated the roll-out of an in-house loyalty club for the Domestications catalog,

including modeling economic trade-offs between discounts and lifts in response.

Performed marketing review for hobby cataloger Annie’s Attic. Through data-base

analysis, identified customer segments which would be most receptive to unique new

offers.

For more than 11 years, have served as financial advisor for the TLC catalog – an

affiliate of the American Cancer Society.

BIOGRAPHY: Fred Anderson, President

Fred Anderson has broad experience in M&A, turnarounds, investigative due diligence, and

financial analysis and management for direct marketing, catalog, and internet operations.

Prior to founding ANDERSONdirect, he was Managing Director with Gruppo, Levey, and Co.,

an investment banking firm specializing in the direct marketing .

From 1991-1998, he was Senior Vice President in charge of acquisitions for Hanover Direct,

Inc. (HDI). At Hanover, he successfully negotiated and closed eight acquisitions, including

Gumps, Tweeds, and Improvements. He also served as CFO of two operating divisions,

responsible for financial planning, reporting and analysis for over 20 titles.

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Serving as CFO of North American Resources, Inc., a $100 million investment fund affiliated

with Richemont, the Swiss-based financial holding company that controls luxury brands

such as Cartier, Mont Blanc, Dunhill and Piaget, Fred co-managed investments in the metals,

manufacturing, oil and gas refining, and soft drink bottling industries; managed a $25

million short-term liquid investment portfolio; and negotiated the acquisition of Hanover

Direct.

Earlier in his career, he served as Chief Operating Officer of Metaframe, Inc., a pet products

manufacturer; and also operated an independent turnaround consulting firm specializing

in troubled companies.

Fred received his MBA from Harvard Business School where he was a Baker Scholar, and his

BA, magna cum laude and Phi Beta Kappa, from Brown University.

SELECTED CLIENTS

Active Forever Alloy Apparel.com AlwaysForMe.com As We Change Award Company of America B&B Electronics Bas Blue Carlton Industries Charley’s Greenhouse Charming Shoppes Cherrybrook Chinaberry, Inc. Cypress Capital Design Toscano Dinewise DLA Piper Doctor Leonards DRG Ebsco Industries Encore Capital Epicenter Foundation Investment Partners Friendship House Gardens Alive Giftcorp Gifts For You Now.com Hanover Direct

Heavenly Treasures Highland Products HobbyHorse Clothing IAP IFIL Capital Imagine the Challenge Jenson USA KEH Kinsman Knights Direct La Collina Toscana Linsalata Capital Lizell Magazines.com Mamiye Group LLC Matrix Group, Ltd. Media Bay Monterey Bay Nassau Candy National Allergy National Business Furniture Nordic Needle Olive Nation Orchard Brands Park Seed Patio.com Performance Bike

Popular Club Potpourri PriveCo Reuseit.com Script and Scribble Sensational Beginnings Sid Savage Sincerely Yours Specialty Commerce Corp Sportif USA Tabcom LLC Taylor Corp. Terra Nova Marketing The Barn Door The DMA The Mustang Group Ltd. TLC TMP Touchstone Tribe Group LLC Tuttle Two’s Company Inc, Universal Screen Arts Valtim Venus Wine Enthusiast Xsports Protective