By Soyoung Kim and Olivia Oran
NEW YORK Feb 28 Uniqlo parent Fast Retailing Co
Ltd and South Korean fashion conglomerate E.Land Group
are separately exploring a deal for large U.S. apparel chain
J.Crew Group Inc, people familiar with the matter said.
J.Crew, which was taken private by TPG Capital LP and
Leonard Green & Partners LP for $2.8 billion in 2011, believes
it should fetch at least $5 billion in any sale, one of the
It was not yet clear whether either Japan's Fast Retailing
or Korea's E.Land have held any substantial discussions with
J.Crew about a deal.
E.Land, one of South Korea's largest fashion and retail
companies, is in talks with potential partners, which could
include an Asian trading house, for a joint J.Crew bid, a second
While there is takeover interest from other companies as
well, owners of J.Crew are not necessarily committed to pursuing
a sale of the company, the people added. TPG and Leonard Green
are in the early stage of exploring exit options for J.Crew,
including an initial public offering, and have yet to make a
decision on the timing and avenue of a potential exit, the
people familiar with the matter said.
All the people asked not to be named because the matter is
A Fast Retailing spokesperson said the company does not
comment on speculation. Representatives for J.Crew and E.Land
did not immediately respond to requests for comment. Leonard
Green and TPG declined to comment.
The Wall Street Journal first reported on Friday that J.Crew
is in talks to sell itself to Fast Retailing for as much as $5
billion, citing a person familiar with the matter, saying the
Japanese retailer approached J.Crew's management this week about
potentially buying the company.
A fresh acquisition of a U.S. fashion brand would be
consistent with Fast Retailing's growth strategy.
Chief Executive Tadashi Yanai has set a lofty goal of
growing his company into the world's top apparel retailer by
2020 by quintupling revenues to 5 trillion yen ($49 billion),
overtaking Zara's Inditex, Hennes & Mauritz (H&M)
and Gap Inc.
While Uniqlo's global expansion has been driven primarily by
Asia so far, it's planning to accelerate a push into the United
States, adding 20-30 shops a year to reach 100 outlets in
several years. J.Crew would give the group a basic clothing line
whose price range falls somewhere between Uniqlo and Theory,
which Fast Retailing fully acquired in 2009.
Fast Retailing says M&A is among its options for continued
growth, especially overseas, to help it expand its sales network
and attract talent in markets where it is a small player.
Comptoir des Cotonniers and Princesse tam.tam are among other
brands acquired over the years.
To aid a push beyond the 17 stores it now has in the United
States, Fast Retailing is looking at offering a more "3-D" fit
for local customers, an executive told Reuters this week.
The company is also due to list Hong Kong Depositary
Receipts on Wednesday in a bid to raise its profile in Asia.
Talk of a potential sale of J.Crew comes as the retailer is
weighing a return to the stock markets as soon as this year. The
brand is working with Goldman Sachs Group as it mulls a
stock market listing, said one of those familiar with the
Private equity firms have been looking to exit their
portfolio investments through a public offering or an outright
sale to another company, as equity markets rallied and debt
financing conditions remained robust to allow for a large
Run by well-known executive Mickey Drexler, J.Crew is a
multi-channel retailer of women's, men's and children's apparel,
shoes and accessories. As of February, the company operates 330
retail stores, including 257 J.Crew retail stores, eight
Crewcuts stores and 65 Madewell stores, according to its
In the fiscal year ended Feb. 1, J.Crew's revenues increased
9 percent to more than $2.4 billion, while adjusted earnings
before interest, tax, depreciation and amortization (EBITDA)
rose to as much as $371 million, from $360 million in the prior