Hilco Global

Hilco Global
Founded 1987
Founder Jeff Hecktman
Headquarters Northbrook, Illinois, U.S.A.
Area served
 International
Key people
 Jeff Hecktman, Chairman & CEO
Services Company Valuation
Business Advisory
Monetization
Liquidation
Website www.hilcoglobal.com

Hilco Global is an American financial services holding company. It operates over twenty businesses and specializes in valuation, advisory, monetization, and liquidation. Headquartered in Northbrook, Illinois, it has offices throughout the world and provides services to companies, their lenders and professional services advisers across a broad spectrum of business categories including retail, industrial and financial. Hilco delivers services focused on maximizing the value of under-performing and excess retail, consumer products and industrial inventory, real estate, intellectual property, including consumer brands, and accounts receivable. Hilco is also considered one of the largest distressed investment and advisory companies in the world.[1]

History

Hilco Global was founded in 1987 by Jeff Hecktman.[2] Originally operating under the name Hilco Trading, the holding company was renamed in 2013, eliminating the use of the name Hilco Trading Company as well as introducing a new logo and website for the company.[2] Hecktman founded Hilco Trading Company after restructuring his family's industrial supply firm and selling off many of the businesses under performing assets.[3]

In 2000, Hilco Global founded a business division named Hilco Merchant Resources LLC, a subsidiary of the company that specializes in retail inventory valuation, retail store closings, retail inventory disposition and asset protection. Michael Keefe, formerly of Gordon Brothers, joined HMR as the CEO the same year.[4] In 2001, the division became known as one of the top five liquidation firms in the United States, having been involved in the $1.8 billion liquidation of Montgomery Ward following that company's bankruptcy.[5] Some of its most notable disposition and liquidation deals included work for Sears, CompUSA, Sportmart, PharMor Rx, and Coldwater Creek.[6][7][8] Hilco Merchant Resources also expanded its operations by opening an office in Australia, taking on liquidations of stores that include Fletcher Jones,[9] Dubbo Everyday Living[10] and Dick Smith.[11]

An HMV store in Wakefield closed as part of the group administration, prior to the purchase by Hilco Capital.

Hilco Global founded its real estate business division in 2000 with the formation of Hilco Real Estate, LLC, to be a national provider of accelerated real estate disposition and advisory services.[12] It has acted as agent or principal for numerous real estate acquisitions and sales. It was co-founded by Mitchell Kahn who served as the company's CEO until 2008.[12] Kahn was replaced by Neil Aaronson as CEO and Gregory Apter was promoted to President of the company.[13] Hilco Real Estate was responsible for numerous large transactions in real estate including 1,200 leases for MCI Worldcom that the company either sold or renegotiated.[14] It also closed hundreds of Blockbuster stores following the company's 2010 bankruptcy as well as approximately 200 Borders Book Stores following that company's 2011 bankruptcy.[15] Hilco Real Estate was also involved with the selling of over 165 unused properties owned by Hostess after that company filed for bankruptcy in 2013.[16]

Hilco Global launched Hilco Capital in 2000 as a partnership with Paul McGowan, who serves as the company's CEO.[17] Based in the United Kingdom, Hilco Capital is involved in retail restructuring and distressed investments. It has expanded internationally with the opening of offices in Ireland, Spain, Germany, Canada, and Australia. Part of its operation includes investing in stressed and defunct companies, most notably is HMV, a music and entertainment retailer associated with the trademark His Master's Voice.[18] After filing for administration, the company has recorded millions in sales and competes against Amazon as one of the leading music and entertainment retailers in the U.K.[18]

Blockbuster Store Closing, Ypsilanti Township, Michigan.

In 2001 Hilco Global formed a business unit called Hilco Appraisal Services LLC, bundling all of the industrial, retail and real estate appraisal services of the holding company into a single unit. Later renamed Hilco Valuation Services, the company is based in the U.S. and has global offices in the U.K., Canada, Australia, Mexico, South American and Asia. One of this units most notable deals was completed in 2005 with the valuation of 29 locations of over 40 million square feet owned by Delphi Automotive.[19]

2001 was also the year Hilco Global expanded its holdings with the formation of Hilco Receivables LLC, a division that purchases bad debt and services accounts receivable.[20] By 2004, Hilco Receivables had acquired more than $2 billion in receivables and in 2006 it opened a 200-person collection center that operated under the name Apex Financial, LLC.[20] The company also provides receivable appraisals to lenders as well as financing to companies who acquire receivables portfolios. One of the most notable transactions involving Hilco Receivables was the purchase of $25 million in account receivables from National Envelope Corporation after its bankruptcy in 2013.[21][22]

In 2004, Hilco Global acquired a retail strategic consulting practice from Arthur Andersen called Senn Delaney – SD Consulting. Hilco Global has operated SD Consulting for the last 10 years with 35 independent consultants. In 2013, Antony Karabus was hired as President and CEO of SD Consulting. Later that year the consulting practice was rebranded as Hilco Retail Consulting or HRC Advisory.[23]

A Linens 'n Things store notifying customers "Going out of Business."

Hilco Global began drawing attention from major investors in 2006 when it was announced that Goldman Sachs Group and Cerberus Capital Management were in talks to purchase a significant stake in the company.[3] Hecktman sold part of the company to both investment companies to help finance other ventures, including private equity style buyouts of faded consumer brands.[1] Hilco Brands was formed from the initial investment as an extension of Hilco Consumer Capital, another company held by Hilco Global. One of the first brands purchased was Halston, a notable fashion line that became popular in the 1970s. Additional brands purchased by Hilco include the Ram and Tommy Armour golf club lines, both companies that were previously based in Chicago,[1] as well as Polaroid and Linens 'n Things.[24]

Hilco Streambank is an additional subsidiary added to the Hilco Global family in 2011. The company was formed to provide services for intellectual property brands such as Borders, Posh, Tots,[25] Linens N’ Things and Circuit City.[26] Hilco Streambank is also known for its IPv4 auction platform used for the purchase and sale of IPv4 assets.[27]

Hilco Global expanded its real estate business in 2012 with the formation of Hilco Real Estate Finance LLC, a lending division of Hilco Real Estate.[28] Hilco Real Estate Finance operated as a private real estate mortgage lending company and in a year and a half had originated loans in approximately 20 states.[29] Hilco Global sold Hilco Real Estate Finance in 2014 to the private equity firm Garrison Investment Group.[29] The cost of the deal was undisclosed with the overall value of the purchase adding to Garrison's already $3.5 billion in assets.[29] After the sale, the company was rebranded as Jordan Capital Finance.[29]

Hilco Global's Industrial unit, Hilco Industrial LLC, made national news in 2014 with its involvement in the disposition of excess municipal transportation assets for the City of Detroit following the city's bankruptcy,[30] the largest municipal bankruptcy filing in the history of the United States.[31] Prior to its involvement with the City of Detroit, Hilco Industrial played a role in the sale of Chrysler and GM plants in 2010[32] as well as Hilco Global's acquisition of the Sparrows Point Steel Mill.[33]

Subsidiaries

List of subsidiaries

  • Hilco Merchant Resources
  • Hilco Real Estate
  • Hilco Valuation Services

  • Hilco Industrial
  • Hilco Receivables
  • HRC Advisory

Philanthropy

As part of its liquidation of Borders Bookstores in 2011, Hilco donated more than 8,000 academic quality books to Chicago Public Schools.[34]

References

  1. 1 2 3 Strahler, Steven R. (17 September 2007). "Hilco CEO puts on glitz". Crain's Chicago Business. Retrieved 19 November 2014.
  2. 1 2 "Hilco Global Unveiled as New Name for Hilco Trading". ABF Journal. 2 July 2013. Retrieved 13 January 2015.
  3. 1 2 Strahler, Steven (11 September 2006). "Wall Street firms eye Hilco Trading". Investment News. Retrieved 19 November 2014.
  4. ↑ Baeb, Eddie (20 January 2001). "Science and art of the closeout". Crain's Business Chicago. Retrieved 16 December 2014.
  5. ↑ Baeb, Eddie (22 January 2001). "Science and art of the closeout". Crain's Chicago Business. Retrieved 19 November 2014.
  6. ↑ "Copeland family selling, Sports Authority / Hilco stalking horse bidder". S News net. 3 November 2006. Retrieved 24 November 2014.
  7. ↑ Brohan, Mark (15 July 2013). "Hilco puts two iconic e-commerce brands up for bid". Internet Retailer. Retrieved 24 November 2014.
  8. ↑ Bathon, Michael (6 May 2014). "Coldwater Creek Liquidation Auction Won by Hilco, Gordon". Bloomberg. Retrieved 19 November 2014.
  9. ↑ Butler, Ben (27 January 2012). "Fletcher Jones stock to be liquidated". The Sydney Morning Herald. Retrieved 19 November 2014.
  10. ↑ "Staff hit by store closure". The Daily Liberal. 12 March 2012. Retrieved 19 November 2014.
  11. ↑ Tucker, Harry (26 February 2016). "DICK SMITH IS GONE -- 3000 staff lose jobs -- stock sell-off today". Business Insider.
  12. 1 2 Schroedter, Andrew (12 December 2008). "Co-founder leaves Hilco Real Estate". Chicago Real Estate Daily. Retrieved 19 November 2014.
  13. ↑ Schroedter, Andrew (12 December 2008). "Co-founder leaves Hilco Real Estate". Chicago Real Estate Daily. Retrieved 16 December 2014.
  14. ↑ Muto, Sheila (16 July 2003). "How Hilco Helps MCI Unload Its Properties". The Wall Street Journal. Retrieved 19 November 2014.
  15. ↑ Spector, Mike (5 April 2011). "Blockbuster Auction Draws Liquidators". The Wall Street Journal. Retrieved 19 November 2014.
  16. ↑ "Judge OKs Hilco to sell Hostess' real estate, other assets". Chicago Real Estate Daily. 8 January 2013. Retrieved 19 November 2014.
  17. ↑ Neal, Dave (17 October 2013). "Music store HMV breaks ground with MP3 download store". The Inquirer. Retrieved 24 November 2014.
  18. 1 2 Craven, Neil (30 August 2014). "HMV stages a comeback: Revived store to topple Amazon as music's number one as customers flock to watch bands and buy CDs and vinyl". This Is Money. Retrieved 19 November 2014.
  19. ↑ "Hilco Global Opens New Valuation Services Office in Sydney". ABL Advisor. 18 September 2014. Retrieved 20 November 2014.
  20. 1 2 "Debt Purchaser Hilco Receivables Opens 200-Person Collection Call Center". Inside Arm. 12 September 2006. Retrieved 19 November 2014.
  21. ↑ Santo, Jamie. "Bankrupt National Envelope Brings In $65M With 3-Way Sale". Law 360. Retrieved 19 November 2014.
  22. ↑ Bathon, Michael (11 September 2013). "NE Opco Wins Approval to Sell Assets for $70 Million". Bloomberg. Retrieved 19 November 2014.
  23. ↑ Wilson, Marianne (29 September 2014). "Survey: Retailers not using consumer data to boost omnichannel shopping efforts". Chain Store Data. Retrieved 20 November 2014.
  24. ↑ Timberlake, Cotten (6 February 2009). "Linens 'N Things Marks Bought by Hilco, Gordon". Bloomberg Businessweek. Retrieved 19 November 2014.
  25. ↑ Gilligan, Gregory J. (2 July 2014). "Firm hired to sell PoshTots business". Times Dispatch. Retrieved 20 November 2014.
  26. ↑ Hallman, Randy (13 July 2013). "Circuit City name is for sale, again". News Advance. Retrieved 20 November 2014.
  27. ↑ "Hilco Streambank Introduces Buy Now Option on IPv4Auctions.com". Investor Hangout. 11 June 2014. Retrieved 20 November 2014.
  28. ↑ Matthews, David Lee (8 October 2013). "Targeting small investors for big profits". Chicago Real Estate Daily. Retrieved 13 January 2015.
  29. 1 2 3 4 Lane, Ben (29 October 2014). "Hilco Real Estate Finance sold, rebrands as Jordan Capital Finance". Housing Wire. Retrieved 19 November 2014.
  30. ↑ Martinez, Shandra (12 September 2014). "Grand Rapids auction company to help sell of Detroit's surplus transportation fleet". MLive. Retrieved 19 November 2014.
  31. ↑ Guillen, Joe; Bomey, Nathan (16 July 2014). "Detroit's Future? More cops, firefighters, but fewer people". The USA Today. Retrieved 19 November 2014.
  32. ↑ Shea, Bill (29 October 2014). "Double-decker trolley car, trucks, buses part of massive Detroit equipment auction". Crain's Detroit Business. Retrieved 19 November 2014.
  33. ↑ Wood, Pamela (18 September 2014). "Sparrows Point owner, government reach cleanup agreement". The Baltimore Sun. Retrieved 19 November 2014.
  34. ↑ Schlikerman, Becky (13 September 2011). "Final chapter for local Borders". Chicago Tribune. Retrieved 12 November 2014.

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