Alloy Scoops Up Old Glory

Teen-focused direct marketing company Alloy announced Tuesday that it acquired Old Glory Boutique Distributing, a direct marketer of music-and entertainment-related clothes and accessories, for $9.6 million in cash.

The deal gives the company Old Glory’s offline and online catalog business, including a database of 300,000 names, which will be combined with the 12.5 million already in Alloy’s own catalog list.

“Old Glory is a recognized direct marketer of music and entertainment lifestyle merchandise — vibrant product categories with great appeal to our Generation Y audience,” said Matt Diamond, Alloy’s chief executive.

Westbrook, Conn.-based Old Glory sells items such as concert t-shirts, tapestries and jewelry through both its catalog and its Web site, www.oldglory.com. The company began in 1969 as a retail store for music merchandise. Old Glory still operates three stores in Connecticut.

Sam Gradess, Alloy’s chief financial officer, said Alloy would integrate Old Glory’s catalog and e-commerce business with its own, by spring bringing the operational functions to Alloy’s New York office and running fulfillment out of the company’s Tennessee center.

With a healthy balance sheet and clear leadership in the teen-focused direct marketing industry, Alloy has rounded out its business through acquisition over the past two years. In August, it laid down $7 million in cash for YouthStream Network’ media and marketing unit, which sells out-of-home and school newspaper media at 8,000 middle and high schools and 2,000 colleges.

Just a month earlier, the company made its biggest acquisition to date: a $48 million cash deal for Market Place Media, a mostly offline ad firm specializing in marketing to minority groups and college-age military personnel.

Over the last two years, Alloy has made a number of acquisitions of teen-focused communications firms, media rep shops, and publishing companies, in order to beef up its core online and offline direct marketing business. In previous years, Alloy has swept up a number of youth-oriented communications, media representation and offline publishing firms to augment its homegrown business of promoting clients through on-site ads and printed catalogs.

The buying binge, combined with the general indifference of teens to the recent economic instability, has helped Alloy perform well during a tough period for both the marketing and e-commerce industries. Last month, the company reported third-quarter revenues of $93.2 million and net income of $11.6 million.

Diamond said the purchase would bump up Alloy’s merchandise revenues by $2 million and add $1 million in incremental earnings before interest, taxes, depreciation and amortization.