Fast Retailing eyes J.Crew´s stake

Parent group to Uniqlo, Japanese apparel group Fast Retailing Co. is said to be in talks with J. Crew Group Inc., the retailer owned by TPG Capital and Leonard Green & Partners LP, to acquire a stake in the latter. According to sources close to the matter that have chosen to remain anonymous due to the

confidentiality of the negotiation, the talks would be at an early stage. Allegedly, The Japanese group is not the only tender for J.Crew, as buyout fund Advent International Corp. is also said to be interested in J.Crew. It is worth a note that the retailer has been analysing the pros and cons of an initial public offering later this year recently.

Media reports published over the weekend pointed to a potential price for the deal, where J.Crew could potentially fetch a valuation of as much as 5 billion dollars, that is nearly two times the 2.64 billion dollars that TPG and Leonard Green paid for J.Crew's buyout three years ago.

Fast Retailing reportedly in talks to acquire stake in J.Crew

As first reported by 'The Wall Street Journal' on Friday, J.Crew would be in talks to sell itself to Fast Retailing for as much as 5 billion dollars. The financial journal cited sources familiar with the matter. Reportedly, the Japanese retailer would have approached J.Crew's management earlier this week about potentially buying the company.

Market insiders highlighted that the private equity firms behind J.Crew have been looking to exit their portfolio investments through a public offering or by selling to another company, as equity markets rallied and debt financing conditions remained robust to allow for a large buyout.

J.Crew's priority is gaining access to funds it can use to expand, noted in an interview with Bloomberg Paula Rosenblum, a Miami-based managing partner at RetailSystems Research. "They're hot, and they obviously want to expand more so they're looking for capital," she said, adding that "The debate of whether to go public or resell to somebody else is endless. Drexler does know the public markets, he's been there before."

For the fiscal year to Feb. 1, revenues at J.Crew increased 9 percent to more surpass the 2.4 billion dollars. Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) came in at 371 million dollars, faring better than a year ago.