Starcrest Products of California, Inc.

Client Profile

Founded in 1971, Starcrest is a multi-channel, direct-to-consumer retailer based in Perris, CA. Through its six catalogs, seven ecommerce channels, and an onshore call center, the Company offers a broad selection of products at affordable prices. Starcrest’s representative product categories include home and office, kitchen and cleaning, clothing and accessories, health and beauty, gifts and décor, toys and games, tools and auto, and seasonal gifts.

Situation

Although Starcrest established strong vendor relationships and significant customer loyalty over its 50+ year history, the business experienced steady declines in revenue and profitability in recent years. Such declines were the direct result of several industry headwinds, including the rise of postage and paper costs, the increase in competition from other ecommerce retailers, the reduced number of suppliers, and the increase in wage costs.

Solution

In order to effectuate a sale of its assets, Starcrest entered into an assignment for the benefit of creditors agreement with an affiliate of Stapleton Group, Inc. (the “Assignee”) in June 2022. The Assignee subsequently retained SSG as its exclusive investment banker to conduct a comprehensive sale process and solicit interest from strategic and financial buyers. The process attracted significant interest from multiple parties and resulted in several available strategic alternatives.  Ultimately, the offer from Silver Star Brands, Inc. proved to be the highest and best value for the assets and provided for a quick closing which was crucial to maintaining engagement with Starcrest’s customer base. SSG’s special situations expertise, significant experience in the direct-to-consumer industry and proven ability to market and close transactions in an expedited timeframe resulted in a competitive environment that maximized asset value for the creditors and allowed the legacy of the catalog brands to move forward under a new operator.