Partnership Success Story: Joint Venture returns 100X in 12 months

Market:

Retail Distribution Company profile:

Blumenthal Uniforms, a privately held fifty-year-old retail business servicing the clothing requirements for private and government professional service providers.

Situation:

Blumenthal had grown into a regional leader of uniforms by adhering to a commitment to one-on-one customer service. This had led to client relationships of more than thirty-five years, steady growth and good margins. However, exponential growth could not be achieved outside its existing territory without sacrificing human contact.

Issue:

Blumenthal’s executive team determined national growth with the existing business model was impossible.

Value-basis at Blumenthal:

Blumenthal has existing intellectual property in the retail sense of the word. It is one of approximately 300 uniform companies in the United States authorized to sell uniforms to the United States Post Office. Additionally, its long-standing business track record enabled Blumenthal to develop preferred delivery and pricing with vendors. Blumenthal executives realized these two company attributes would be compelling to a potential partner.

Partnership strategy:

Joint manufacturing, retail and marketing partnerships were pursued and discounted after revenue splits and customer ownership issues continued to surface. Eventually, the Blumenthal team realized a joint venture with a mail-order uniform company would provide national expansion and high revenue with nominal risk.

Partnership formed:

Joint venture with Postal Uniforms Direct in July 2000

Value proposition:

Postal Uniforms Direct (a new company) run by an established discount uniform company’s manager. Using its on-line ordering, inventory control, warehousing and distribution supply chain, Postal Uniforms Direct takes advantage of Blumenthal’s preferred vendor relationships and pricing as well as its postal uniform license. In return, Blumenthal receives an equitable share of profits without increasing output.

Risk Factor:

Low for the manager of the new entity and Blumenthal; each firm had a track record of running efficient and profitable businesses.

Initial investment:

Thirty thousand from Blumenthal, at the time a ten million dollar business and twenty thousand from the manager (partner) of Postal Uniforms Direct.

Partnership return on investment:

Initial investment returned within the first twelve months of operations. According to CEO Mark Blumenthal, his original investment has yielded a “multi-100 time return on investment”.

For more information on Blumenthal, contact: www.blumenthaluniforms.com



Partnership Success Story: Joint Venture returns 100X in 12 months - To learn more about this author, visit Sarah Gerdes's Website.

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