Provide Commerce to acquire RedEnvelope
Provide Commerce Inc., parent company of ProFlowers, has acquired the assets of online gift retailer RedEnvelope at a bankruptcy auction.
Provide Commerce, which will assume ownership of RedEnvelope on June 23, operates an e-commerce marketplace for products direct from the supplier to the customer. The company's platform combines an online storefront, proprietary supply chain management technology and established supplier relationships, enabling it to bypass traditional supply chains of wholesalers, distributors and retailers. Besides ProFlowers, its brands include Secret Spoon, Cherry Moon Farms and Shari's Berries.
RedEnvelope filed for Chapter 11 bankruptcy protection on April 17 following the revelation that its bank would no longer provide the multichannel merchant with the ability to draw on its credit line. It is one of several merchants to suffer from the tough economic environment coupled with banks that are increasingly wary of extending credit to retailers.
At the time of the bankruptcy filing, RedEnvelope entered into an agreement with Creative Catalogs Corp. to purchase all of RedEnvelope's assets and assume certain of the company's obligations for $5.7 million. In addition the cataloger received a $4.5 million debtor-in-possession credit facility and loan extended by Creative Catalogs and Granite Creek FlexCap so it could continue business operations during the bankruptcy sale process. As part of the agreement, RedEnvelope was free to accept other bids.
This is the second time this year that Creative Catalogs Corp. has lost a bid to acquire an ailing catalog and e-commerce business. In April, Taylor Corp. beat out Creative Catalogs at a bankruptcy auction for Lillian Vernon.