NEW YORK, United States — J.Crew Group Inc. has hired investment banks to prepare for an initial public offering of its Madewell apparel business, as the US clothing chain seeks ways to revive its fortunes, three people familiar with the matter said on Thursday.

The move comes three months after J.Crew said it would explore an IPO of the division. The New York-based company is seeking to shore up its strained finances, amid competition from e-commerce firms such as Amazon.com Inc, as well as brick-and-mortar retailers.

J.Crew has enlisted Bank of America Corp, Goldman Sachs Group, JPMorgan Chase & Co and Morgan Stanley as the lead underwriters for an IPO of Madewell expected sometime after the US Labour Day holiday in September, the sources said.

The retailer has a debt load of roughly $1.7 billion. It expects Madewell, known for its denim clothing, to be valued by the stock market at significantly more than that, the sources added. J.Crew will not sell down its entire holding in Madewell right away, according to one of the sources.

The sources spoke on condition of anonymity because the details of the IPO preparations are confidential.

Representatives for J.Crew, Bank of America, Goldman Sachs, JPMorgan and Morgan Stanley declined to comment or had no immediate comment.

J.Crew was taken private in 2011 by private equity firms TPG and Leonard Green & Partners LP in a $3 billion leveraged buyout. The private equity firms declined to comment.

In April, J.Crew said it was exploring alternatives for reducing debt and restoring profitability, and named operations chief Michael J. Nicholson interim CEO.

It had enlisted restructuring advisers at Weil, Gotshal & Manges LLP, the law firm that helped negotiate a previous debt workout for the company and steered department store operator Sears Holdings Corp through bankruptcy, Reuters reported in March.

Madewell has experienced rapid growth, and makes up about 20% of the company's overall revenue, according to regulatory filings.

A slew of US apparel retailers in recent months have carved out divisions to bring overall business back to life.

In February, Gap Inc announced plans to separate its better-performing Old Navy business into a publicly traded company.

The Madewell IPO would also cap a run of listings among major jeans brands this year, including Levi Strauss & Co . Denim is undergoing a revival following years of athleisure dominating casual wear.

By Mike Spector and Joshua Franklin; additional reporting by Harry Brumpton and Melissa Fares; editor: Rosalba O'Brien