Tiffany's Sparkle May Have Blinded Investcorp

A decade is a lifetime in the buyout business, and most of the outfits that engineered the big retail deals of the 1980s have long since turned to other things. But Investcorp, the Bahrain-based investment bank with hefty assets and a low profile, has continued to snap up retailers. Founded in 1982 by Chase Manhattan banker Nemir A. Kirdar, the firm did its first big deal when it bought Tiffany & Co. in 1984 and took it public in 1987 at a profit of more than $100 million. Since then, Investcorp has bought retailers with an ardor that would make Robert Campeau blush.

After spending billions on acquisitions, the firm has quietly assembled a massive retailing empire. Its holdings range from the tony to the homey--from Saks Fifth Avenue and Gucci to floor-covering retailer Color Tile and the Circle K convenience-store chain (table)--as well as stakes in some non-retailing properties, such as trucking company Burnham Service Corp. and Dellwood Foods Inc. But if Investcorp hoped to duplicate the Tiffany magic with its subsequent retail acquisitions, it has been sorely disappointed. "Tiffany was a comet that went through the atmosphere and blinded them for a long time," says a former Saks executive. "Investcorp thought every deal was going to be a Tiffany."