Dive Brief:
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The 61-year-old, family-owned, Midwest-based farming and hunting chain retailer Mills Fleet Farm will be bought by New York City-based private-equity firm KKR Co. for an undisclosed amount, the companies said Tuesday. The retailer has headquarters in Appleton, Wisconsin & Brainerd, Minnesota.
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A sale to KKR, which owns Toys R Us and U.K. pet supplies retailer Pets At Home, has been anticipated for weeks ever since the family put the business up for sale. Reuters reported last month that KKR was a potential buyer and that the 35-store chain could fetch $1.2 billion including debt in an acquisition.
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Most of the Mills family members still involved with the company are expected to depart after the sale is finalized, although the family will reportedly retain a small stake in Mills Fleet Farm.
Dive Insight:
When the third generation of a family-owned company like Mills Fleet Farm looks to sell, it's an indication that the business may be ripe for new blood.
The retailer, with 35 stores in four states, is a favorite with customers in its region. It has a catchy theme song (which the company is careful to note it holds the copyright to), and offers both country and rock and roll versions on its website.
But the retailer is also in need of an upgrade. While the upbeat song is familiar to many in the Upper Midwest, its lyrics reflect an era when women supposedly wouldn’t shop there, a notion contradicted by consumer trends and its own imagery. Stewart Mills III, an executive at the company, told the Brainerd Daily Dispatch last fall the retailer needs more money for store expansion plans, warehouse improvements, and distribution upgrades.
Beyond that, the hunting-fishing-sportsgear retail space that Mills Fleet Farm occupies is especially tough, with gun sales slowing and stalwarts like Cabela’s and Bass Pro Shops, among others, scaling back expansions and considering their own options.
While much has been made of gun sales spiking at a time of political maneuvering over gun control legislation, hunting and farming in general are in decline. Many of the old standbys in the field could use significant e-commerce improvements, and there may very well be room for consolidation as the country's population becomes increasingly urban.
