J. Crew Group Inc. is in talks to sell the clothing retailer to
Japan's Fast Retailing Co. for as much as $5 billion, said a person
familiar with the matter.
Fast Retailing, which owns the Uniqlo apparel chain, this week
approached J. Crew's management about potentially buying the
private-equity-owned business, the person said. J. Crew is seeking
upwards of $5 billion for the business, the person said. It
remained unclear whether Fast Retailing would pay that much and
whether the two sides have yet discussed a price.
The talks are at an early stage and could collapse in coming
days, the person cautioned. J. Crew also recently received takeover
overtures from a couple other suitors, this person said. Their
identities couldn't be learned.
The discussions come as J. Crew's owners, private-equity firms
TPG and Leonard Green & Partners LP, also mull taking the
apparel chain public later this year. In early January, the company
asked Goldman Sachs Group Inc. to begin work on a potential initial
public offering, the person said. The IPO planning hasn't progress
beyond that.
The Standard & Poor's 500 Index on Thursday closed at a
record high, prompting private-equity owners to rush to take
companies they own public.
J. Crew, run by well-known retail industry executive Millard S.
"Mickey" Drexler, operates more than 400 stores in the U.S., Canada
and the U.K. Its revenue rose 9% to $2.4 billion in the fiscal year
ended Feb. 1.
Fast Retailing, which employs more than 23,000 people and has a
market capitalization of about YEN3.7 trillion ($36 billion), owns
other brands besides Uniqlo, including Comptoirs des Cotonniers,
Helmut Lang, Theory and Princesse Tam Tam. Uniqlo sells t-shirts,
sweaters, and cold-weather gear to men, women and children, with
entry prices as low as $9.99 for a pair of jeans. The brand has
developed a following among shoppers looking for well-made clothing
at affordable prices.
TPG and Leonard Green agreed to take J. Crew private in 2010 for
about $2.8 billion, in partnership with Mr. Drexler. The deal
marked TPG's second stint owning the company, with one of the
buyout firm's founders remaining on its board in the interim.
Write to Mike Spector at mike.spector@wsj.com and Dana Mattioli
at dana.mattioli@wsj.com
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