Brentwood Associates' $688-million fund to bet on retailers, eateries

Brentwood Associates' $688-million fund to invest in retailers and restaurants with strong brands

Private-equity firm Brentwood Associates has wrapped up a $688-million fund that will be invested in retailers, restaurants and consumer goods companies.

The fund's $688 million in commitments, primarily from pension funds and other large investors, surpassed its $500-million target. A previous fund closed with commitments of $439 million.

Bill Barnum, a partner at Brentwood Associates, said the investment firm is looking to take a stake in companies that already have strong brands.

"We are going ... to invest in consumer brands that have extreme customer loyalty," Barnum said. "They will be retail companies. They will be direct-marketing businesses. They will all be branded."

The Los Angeles investment firm's fund has already taken a stake in four companies, including Lazy Dog Restaurants and California home goods chain Z Gallerie.

Brentwood bought a majority stake in the Gardena-based Z Gallerie in October and plans to aggressively push for faster growth. The company, whose chief competitors include Restoration Hardware and Pier 1 Imports, has 55 stores in 20 states.

"It's become a meaningful brand in this space, but still has a lot of runway left in growth," said Steve Moore, a partner at Brentwood.

The siblings who co-founded Z Gallerie will remain at the helm, Moore said. Joseph Zeiden is chief executive, Michael Zeiden serves as chief financial officer and Carole Malfatti is head of merchandising and marketing.

"We are in essence going to help them by bringing additional resources to grow the business," Moore said.

He said Z Gallerie could at least double its store count and also expand its e-commerce business. The company will also focus on direct marketing tactics such as a catalog.

Follow Shan Li on Twitter @ShanLi

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