It looks like another major retailer is going private. Two private-equity firms, TPG Group and Leonard Green & Partners, are offering to acquire J Crew and its 220 stores for $2.86 billion, or $43.50 per share. The proposal follows the recent acquisition of Gymboree for about $1.8 billion.
The TPG-Leonard Green deal could get run up. Other suitors have until Jan. 15 to make a better offer.
J Crew is one of the success stories of the recession, and CEO Millard Drexler, is one of the most respected figures in the retail industry.
Its most recent quarter wasn't the retailer's best, though. J Crew's same-store sales fell 1%, and net income dropped in its Q3 fell to $37.8 million from $43.9 million during the same year-ago period.
We're not implying that J Crew is in trouble, but the fashion business just seems so cyclical. Is this group or, or another player that steps in, paying too much for a chain that doesn't have very many stores and could be at the mercy of a fickle consumer?
Of course, its limited number of stores and two smaller new concepts, Madewell and crewcuts, could mean growth potential. What do you think?
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