C-Mart gets new owner, has plans to expand

Online liquidator Asset Store buys controlling interest

Owners of C-Mart

Sun photo by Barbara Haddock Taylor, July 30, 2007

Childhood friends Brad Bondroff (left) and Daniel Shuman of the Asset Store are the new owners of C-Mart.


By Hanah Cho and Andrea K. Walker | Sun reporters
July 31, 2007

Local discount retailer C-Mart plans to expand to Miami, Las Vegas and New York now that its owners have sold the business to a Baltimore company that brokers the sale of unwanted merchandise.

The Asset Store, an online liquidator that was founded in 2004 by childhood friends, said yesterday that it acquired controlling interest in family-owned C-Mart, which began in an old Harford County five-and-dime store in the 1970s.
Asset Store executives Daniel Shuman and Brad Bondroff will become C-Mart's chief executive officer and president, respectively, but C-Mart management and employees will stay in place.

Executives at C-Mart, known for its hand-scrawled newspaper advertisements and for its bare-bones stores that sell a clutter of discounted designer clothing and furniture, said the homegrown operation needs to employ better technology to expand online and add more stores.
They hope the acquisition will move C-Mart beyond its mom-and-pop roots and into the national market, where it can better compete against other discounters.

While C-Mart's attraction has long been its great buys in a no-frills setting, the operation is built on a retail model from years past -- workers use pencils and paper to record inventory and price merchandise. Asset executives want to use their expertise in technology to upgrade C-Mart's inventory process, help sell its merchandise online and create a larger "bricks and clicks" business in other cities.

"We recognize and have great appreciation for such a powerful brand that C-Mart is -- as a staple in this region and in the industry," said Bondroff, 29, who grew up in Owings Mills. "It allows us to bring our experience, our technology and our view of what we can do in terms of turning this brand into a national enterprise."

Financial terms of the deal were not disclosed.

 C-Mart's identity and brand name are expected to remain, executives said. It has a loyal and large clientele; many of its shoppers travel to Joppatowne from neighboring states. But in more than 30 years in business, it has expanded slowly, opening just its second location earlier this year.

"Part of our brand is that we're kind of quirky, we don't take ourselves too seriously and we're fun," said Keith Silberg, nephew of C-Mart founder E. Douglas Carton, who has become less involved in the business in recent years. "This is such an amazing step for us, and if our identity got lost in this that would be a great loss. We want to have handwritten ads in USA Today."

Retail experts say there is room in the national market for C-Mart if it picks the right real estate and markets with the right demographics. Filene's Basement, Loehmann's, Marshall's and TJ Maxx are retailers that operate similar businesses successfully.

"Most consumers are still value-conscious and looking for quality," said Thomas H. Maddux, president of KLNB Retail, a commercial real estate company in Towson. "That's what everybody wants these days. They want name-brand quality at a value price."

Carton started C-Mart in 1975, bringing high-end brands to people on middle-class budgets in an era when discount shopping was a new concept. He was C-Mart's president but will now serve on its board of directors.

 C-Mart buys its merchandise from insurance company salvage lots, which collect items from stores trying to get rid of damaged goods. It also gets goods from sample sales and liquidations.

Every few years, the retailer makes news for merchandise so exclusive people camp out to be the first in the store.

Six years ago, there was the shipment of Kate Spade bags. Two years ago, it was Prada, Escada, Gucci, Hermes and Chanel goods that came from a high-end department store that C-Mart wasn't allowed to name.

 C-Mart opened its second, 120,000-square-feet location in February in an old Sam's Club in Landover, Prince George's County. The company has 150 employees at its two stores.

The Asset Store sells surplus properties and equipment -- including hotel and office furniture and medical and restaurant equipment -- for other businesses online. It also operates two liquidation furniture stores in Baltimore and Suitland.

Shuman, 30, said the Asset Store will barcode C-Mart's inventory, including clothes, accessories and furniture, and install an advanced sales system. And the Asset Store's full-service trucking division will help reduce C-Mart's transport costs, Shuman said.

The company plans to expand to Miami first in hopes that it can ship warm-weather apparel and other items there when the weather here is cold. Las Vegas and New York would follow in the expansion plans.

Shuman and Bondroff, who attended McDonogh School and the University of Maryland's business school together, founded Asset in their 20s with the help of Advertising.com co-founder John Ferber. The company has 15 employees and 10 truck drivers. The Asset Store will continue to operate as a stand-alone company.

Ferber, who grew up with Shuman, serves on the Asset Store's board of directors. He was named chairman of C-Mart's board.

Ferber and other board members encouraged Shuman and Bondroff to seek acquisition opportunities. The two entrepreneurs approached C-Mart in December, and the negotiations were helped by their desire to keep building on the Carton family's success, they said. And it also helped that Ferber and Shuman knew Silberg from growing up in Pikesville together.

"People have been trying to buy C-Mart for years and years," Shuman said. "We got the dialogue started and instead of pitching [Carton] to sell ... it was the opportunity to take the company further than the current people could take it."

 C-Mart's Silberg said the company's old way of doing things made it hard to track sales and operate the business efficiently.

"We've always been the kind of business to keep track of things with pencil and paper and make deals with our gut," said Silberg, who will be a merchandise buyer under the new owners.

He said Asset's technology will help C-Mart keep better sales records, and the business will operate more efficiently. Under the umbrella of a larger company, C-Mart will be able to buy merchandise cheaper and sell it to more customers, he said.

hanah.cho@baltsun.com andrea.walker@baltsun.com