After Two-Year Wait, Bear Pulls Trigger On Swimsuit Deal

Firm: Bear Growth Capital Partners

Target: Everything But Water

Terms: Not disclosed

Headquarters: Orlando, Fla.

Revenue: Estimated $30 million

Law firm: Buyer: O’Melveny & Myers

Financial Advisor: Seller: Broadsword Partners

Bear Growth Capital Partners (BGCP) will have plenty to wear on the beach this summer. The firm has purchased the high end, boutique chain Everything But Water (EBW), one of the largest independent retailers of women’s swimwear in the country.

Terms of the deal weren’t disclosed. However the deal nets BSCP a 22-year-old company with 34 stores in 14 states and Puerto Rico. The company will bring on as chairman Rick Sarmiento, who is formerly the CEO of specialty retailer White House | Black Market, which was purchased by Chico’s FAS Inc. EBW Founder and President Stacey Siegel is departing after the sale, but will be succeeded by Ann Tucker, a 15-year veteran of the Orlando, Fla.-based company.

Joe Scharfenberger, a managing director at BGCP, said the firm had initially heard about EBW from the company’s banker, Broadsword Partners, about two years ago. BGCP took a hard look at the time, but couldn’t see eye to eye with the sellers on terms. After another 18 months of monitoring its performance, getting smarter on the industry and “keeping it on our white board”, BGCP was ready to pounce, said Scharfenberger.

The company touts its “exceptional shopping experience,” which Scharfenberger said is much better than what shoppers would find in the typical department store. At an EBW shop, the all-female staff is knowledgeable about swimsuit brands and the stores have a high-end feel.

The company has roughly 250 employees and sales of about $30 million. It sells suits in the $50 to $200 price range from designer brands like Anne Cole and Michael Kors. It also sells specialized maternity and mastectomy suits. BGCP’s aim is to grow the company to at least 100 stores and to as many as 250, said Scharfenberger. Other swimwear-only chains include Water Water Everywhere and Swim N’ Sport.

Bear Growth Capital Partners, which does not operate its own fund, is a subgroup within Bear Stearns Merchant Banking (BSMB). It has closed nine investments since inception in 2003 and on six of the nine it was the lead investor. It typically makes investments in companies valued at between $20 million and $100 million.

BSMB’s latest fund is the $1.5 billion, vintage 2000, Bear Stearns Merchant Banking Fund II LP. BSMB has made investments in more than 50 companies and is focused on retail, financial services and consumer products. Bear Stearns is currently seeking as much as $1.75 billion for a follow-up fund, according to SEC filings, a number that could change according to the language in the documents.

The investment in Everything But Water should not be a new area for Bear. The firm has been an active player in the wormen’s retail space. Most recently, the New York group acquired a stake in women’s shoe and bag maker Stuart Weitzman Holdings.—M.C.