An investment in big-and-tall retailer Casual Male could have easily been the deal that brought Antoine Treuille and Gilbert Harrison together. But, it was their decision not to invest in the Casual Male that brought the two together. Instead , Treuille and Harrison embarked something slightly larger. Together the pair founded Mercantile Capital Partners as an outgrowth to Harrison’s Financo investment bank.
Treuille, the executive managing director of the firm, came to the U.S. from France in 1974 to complete an MBA program at Columbia University. He had been running Charter Pacific Corp. when Harrison approached him about the partnership, and the two set up Mercantile Capital Partners as an adjunct private equity shop to Financo. The firm, aligned with Treuille’s background and Financo’s concentration, focuses on investments in the merchandising/consumer-oriented sector and spans more than just retail and clothing.
“It includes manufacturing, distribution and logistics companies, as well as food
Mercantile was established in 1998, and for Treuille, who went from running his own firm to joining a captive outlet, the new job was viewed as expanding his opportunities rather than limiting them. He says that the partnership with Financo gives Mercantile a competitive advantage through facilitating the deal sourcing process and providing industry expertise. “It’s something that is unique to us,” he says.
When Treuille graduated in 1974 with his Columbia MBA, probably the last place he thought he’d be working was behind the register of a Museum Co. retail store or folding shirts at Tommy Bahama. But as an investor and board member, Treuille makes it a point to kick the tires and see how a business operates at the ground level. “We take pride in working at the store level. Sometimes we do stick out a bit, but we have fun. It also signals to management that we like what we do and we feel that attention to detail is what it’s all about,” Treuille says.
And it’s the attention to detail that Treuille believes, that can “make or kill a business” in retail. “We don’t micro manage, but from the board level you need to have an intimate knowledge of a business.”
Mercantile’s dedication to the middle market fits Treuille’s liking as well. It’s this range of business where he feels his impact is the greatest, while the risk is somewhat tempered. “We buy young companies that have models that are scalable. If you open 10 stores across a region, there is a very good chance that you can open 10 more. And in retail you can test programs and methods and get instant feedback,” Treuille says. As far as the risk involved, he adds, “You don’t have to bet the ranch.”
As part of Mercantile, Treuille has made investments-both buyouts and minority deals-in a number of name brands, including Hawaiian shirt maker and retailer Tommy Bahama, young-adult home furnishings outfit Dry Ice, kitchenware retailer Le Gourmet Chef, online grocer FreshDirect, apparel manufacturer Partex and the Chicken Out Rotisserie restaurant. (The firm recently exited its investment in Tommy Bahama, in which it co-invested with Saunders Karp & Megrue, and has thus far realized an IRR of 30%, with the upside of a potential earnout still available.)
Looking ahead, Treuille likes the prospects he sees in the buyout industry, especially for the middle market, and as long as he keeps doing what he’s doing, he will continue to enjoy his work. “I really love this job,” he says. “Working with the management teams, building incentive programs-it’s the touchy-feely part of this job that I enjoy.”
Education: MBA – Columbia University; Undergrad – Ecole Superieure des Sciences Economiques et Commerciales
Career Path: Citibank, Entrecanales Inc, Desai Capital Management, Charter Pacific Corp. (founded), Mercantile Capital Partners
Favorite Book: The Etruscan Smile, by Velda Johnston
Favorite Travel Destinations: Peru, Argentina, Spain, France
Most Admired Historical Figures: Napoleon, Admiral Nelson, Franklin D. Roosevelt, Mother Theresa
Hobbies: Clock collecting: 1790 to 1810 French clocks
Pet Peeves: None