In 1990, my brother Massoud ‘Mike’ Altirs and myself established GMA Accessories Inc. as a small fashion business, manufacturing hair accessories out of our Brooklyn basement. Operating as Capelli New York (CNY), we gradually expanded our business internationally over 25 years. As our company grew, we sought to acquire companies that could diversify and expand our offerings.
We bought Ballet Jewels in 2014, the acquisition made sense as a way to also further distinguish our business in jewelry. Already a powerful name in private-label costume jewelry and design, we saw Ballet Jewels as a sound investment that would allow us to build upon their 60-year reputation.
As an entrepreneur who has acquired businesses both large and small, I’ve gained insights into the benefits and challenges that the process presents. During and after the Ballet acquisition, I developed two principles which may help emerging business owners find and assess the most promising deals:
Understand When and Why to Buy
When we purchased Ballet Jewels, we already liked and were familiar with the family-owned company. Being in the same industry, we understood all the distribution channels and the economics of Ballet’s operations, including the overhead and resources which could ultimately help CNY make financial gains. We also had the same buyers as Ballet Jewels, so we had already built those professional relationships.
It took us about 2 years to fully acquire Ballet, which seems like a long time, but makes sense when you consider the alternative: waiting 5-10 years for our own volume to increase to the same level. Before signing the deal, it’s essential to complete your due diligence. New investments can be expected to take time, but the buying company should make sure that the acquisition is financially viable and that the resources are in place to follow through. If it’s not right for you to expand your company, better to play it safe.
Integrate Work Cultures
Of course, there were also the challenges that come with acquiring any business. CNY was ultimately the one responsible for making each team’s transition a smooth one, and a rigorous integration strategy was imperative to create a successful team in the end. Our management was tasked with developing a company culture that wouldn’t interrupt everyday business, and that would provide new employees with a clear set of central business goals and principles. Flexibility was key, to ensure both teams fit comfortably into the other’s preexisting culture and legacy.
It’s important to remember that not every acquisition is meant to be, and not every company needs to acquire. For entrepreneurs making their first acquisition, it’s essential to first decide whether your values are compatible with the other half of the deal. We succeeded by creating a mature, unified vision, while at the same time staying true to our principles—and letting Ballet stay true to theirs.