Highland’s Blossomless Bet on Blue Tulip—Retailer Seeks Bankruptcy Protection

Highland Capital Partners is feeling the pinch of the reeling retail market. The Lexington, MA, venture fund has a 44-percent ownership stake in Blue Tulip, a New York-based chain of specialty gift shops that has filed for bankruptcy protection and plans liquidation sales at its 24 stores, according to a PE Hub report.

Highland’s share of ownership in the retailer sounds abnormally large, but the firm has some deep expertise in the consumer market. Indeed, Highland partner Tom Stemberg, a founder of Massachusetts-based office products giant Staples (NASDAQ:SPLS), was reportedly managing Highland’s investment in Blue Tulip. (I called Stemberg’s office this morning for the full scoop on Blue Tulip, but he wasn’t available.)

Stemberg is one of the stewards of Highland’s $300 million consumer fund, from which capital was invested in Blue Tulip. Not long after the fund closed in late 2007, Bob talked to Highland partner Ted Philip, who explained the rationale for raising a new fund focused on “big” opportunities in the consumer market. Obviously, Bob’s visit and Philip’s comments came before the recession dealt a serious blow to that market.

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