Sun Capital Partners has hired Chicago-based investment banking firm Duff & Phelps to help raise $50 million in equity capital for the Musicland Group, it was revealed today (October 18) on the Sun Capital Web site.
As part of the effort, Sun Capital has committed to put up half of the equity ($25 million), while the investment bank will look for a partner to put up the other half to own a stake in the 900-store Musicland chain.
The proceeds will be used to accelerate the roll out of the chain’s new strategic initiatives, including new store concepts, visual merchandising enhancements and technology initiatives aimed at improving customer service.
The strategy comes on the heels of the resignation of Eric Weisman, who had been running Musicland as chairman/CEO since Sun Capital Partners assumed ownership of the chain. He was replaced by veteran retail executive Jack Chadsey, who had previously held senior positions at a number of retail chains including Kohls.
If the funding is completed, it would mean that Sun Capital has upped its Musicland equity commitment to $50 million, but diluting its ownership of the chain.
When Sun Capital assumed ownership of Musicland in June 2003, the firm put no equity in the game, later contributing $25 million in April 2004.