Everything But The House has dealt in second-hand goods for years, allowing alert shoppers to nab rare treasures for as little as $1.
But in 2019, it was the company's founders who may have scored a steal of a deal.
Jacquie Denny and Brian Graves founded the Blue Ash company in 2007 and a decade of soaring growth later it was worth $215 million – labeled Ohio's most-valued start-up by venture tracker PitchBook.
But after long-time investors pulled the plug and put the company up for sale in summer, Denny and Graves swooped in with new investors and bought it back for $3.5 million in August.
The deal put the duo back in charge of their own company for the first time in seven years. They believe the company will turn a profit for the first time in 2020 after resuming control.
While EBTH never filed bankruptcy, it faced potential liquidation over the summer in a similar court proceeding filed in Delaware. The founders looked on helplessly as their baby looked to be cut to pieces.
"At one point, we were beginning to wonder what we would do next if there was no EBTH," said Graves, who is now the CEO. "My wife saw me losing sleep over it and said: 'This may be God shutting a door.' "
As the anxiety reached its height, Denny and Graves decided to bid for the company themselves – and discovered they had an unforeseen advantage.
"It was extremely scary... but we're pretty scrappy personalities. We weren't going to just walk away," Denny said.
Denny and Graves sat down with The Enquirer in December to describe how they got their company back.
This is their story:
The business was better – then it wasn't
EBTH was bouncing back in 2019 after a tumultuous couple of years.
The company was approaching profitability under the leadership of Scott Griffith, a Boston tech industry veteran. The steady improvement followed the sudden departure of a previous CEO in early 2018 and months of retrenching that slashed 600 jobs and shuttered 21 locations.
But suddenly during the summer, the company’s East Coast investors grew impatient with the company’s progress to profitability and refused to give it any more money. Other investors could not be found.
Company founders Denny and Graves came into work on a Monday in late July and were pulled aside by the CEO and told EBTH was being placed into an "assignment for the benefit of creditors" (ABC for short) – a court proceeding similar to a bankruptcy, where the business’ assets would be put up for sale.
EBTH’s venture capital investors were cashing out completely – taking whatever money they could get and writing off the rest of their investment.
The company’s future was thrown into uncertainty: it might continue as an ongoing business or it might sold off for parts with its web site, mailing list, inventory and its Blue Ash processing center possibly going to all different owners.
Denny and Graves watched as the company they founded in 2007 faced oblivion.
Employees swarmed, asking what was happening and whether their jobs would continue to exist in the coming weeks. The founders could only keep doing their job as if nothing was changing.
"We tried to keep a sense of stability and normalcy, but it's scary to know in four to six weeks the company, the philosophy and the ownership will change," Denny said.
Hope begins to fade, then an inspiration
The anxiety got even worse.
As the court proceeding marched ahead, two critical dates loomed: one where bids for assets would be submitted and another where they would be considered by the court.
A leading bidder did not appear.
Denny and Graves faced an ominous question: what if nobody made a bid to keep their company operating?
The possibility was ironic considering EBTH had one of its best sales months of the year. Some collectors were cleaning out, trying to prepare for a possible future after EBTH. But other long-time vendors, customers came out of the woodwork trying to support a beloved local business.
"My inbox blew up with hundreds of emails with people asking what they could do to help," Denny said.
Some local supporters even expressed interest in investing. The two founders wondered if they should make a bid themselves.
"The feeling was we had to do this: we'd never forgive ourselves if we didn't try," Graves said.
The last half of August became a mad dash for cash for Denny and Graves. The duo did their regular jobs, but also worked the phones and their business networks to solicit money for a bid to buy their company back.
Graves got two or three hours of sleep a night.
Denny's family supported her with lots of "quiet time" when she returned home late and exhausted.
The work was more than asking for money – the duo had to create a post-ABC business plan that was revised several times.
But when it came time to finally submit bids, Denny and Graves realized they had a critical advantage over rivals: their inside knowledge of the company allowed them to propose a real offer.
Other bidders were asking the court for more time to crunch numbers when the founders offered cash.
Denny and Graves won the bid, acquiring a business once valued at $215 million for $3.5 million – less than two cents on the dollar.
Looking to the future: there is one
Founders Denny and Graves won the bid, but still had hard work to do.
As part of putting together their bid, the duo had to decide which parts of the business wouldn’t be acquired and would likely shut down. The pair ultimately only agreed to take back the Blue Ash and Cleveland operations, but assisted in winding down and closing its four other locations.
Nearly 200 jobs were cut.
At year’s end, however, EBTH had new ownership, resumed growing and was on target to turn a profit in 2020. Revenues are projected to hit $50 million next year.
The company now employs about 215.
The company is scouting sites in Columbus to relocate and expand its operations there. It’s currently hiring for five open positions.
For the latest on Cincinnati business news, P&>, Kroger and Fifth Third, follow @alexcoolidge on Twitter.
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'We'd never forgive ourselves,' Everything But The House was about to vanish. Then the founders stepped in. - Cincinnati.com
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