Japan's Fast Retailing and US multi-brand apparel chain J Crew end merger talks
19 March 2014
Merger talks between Japan's Fast Retailing, the holding company of Uniqlo apparel chain, and US multi-brand apparel retailer J Crew Group, has broken down, The Wall Street Journal reported, citing people familiar with the matter.
While it is not clear exactly why the talks broke down, the fact that the talks became public played a role, the report said.
It is also possible that the talks could be revived, as well as another bidder could table an offer, the report added.
Early this month, The Wall Street Journal reported that US multi-brand apparel retailer J Crew was in talks to sell itself to Japan's Fast Retailing, which could fetch its private-equity owners TPG Capital and Leonard Green & Partner around $5 billion. (See: Japan's Fast Retailing in talks to buy J. Crew Group in $5 billion deal)
With the talks breaking down, TPG Capital and Leonard Green may revert to their original plan of an IPO for the apparel chain later this year with a valuation of $5 billion. It had already hired Goldman Sachs to begin work on a potential listing.
TPG Capital and Leonard Green had acquired New York-based J Crew in late 2010 for $3 billion. (See: PE firms to buy US clothing retailer J Crew for $3 billion)
Earlier in 1997, TPG Capital had acquired an 88-per cent stake in J Crew for nearly $500 million, and took it public in 2006.
With annual revenues of $2.42 billion, J Crew is a multi-channel women's, men's and children's apparel shoes and accessories retailer operating through around 400 retail stores, including 257 J Crew retail stores, eight crewcut stores and 65 Madewell stores in the US, Canada, and the UK.
Yamaguchi City-based Fast Retailing operates 2,568 stores under the Uniqlo, GU, Theory, Comptoir des Cotonniers, Princesse tam.tam and J Brand.
It is a specialty-store that retails private-label appareland controls the entire clothes-making process from design through manufacture and retail.
Fast Retailing has a market value of nearly $20 billion, employs around 23,000 people and posted net profit of $888.4 million last year on revenues of $11.2 billion.