The Business of Fashion
Agenda-setting intelligence, analysis and advice for the global fashion community.
Agenda-setting intelligence, analysis and advice for the global fashion community.
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.
ADVERTISEMENT
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.
ADVERTISEMENT
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
In 2020, like many companies, the $50 billion yoga apparel brand created a new department to improve internal diversity and inclusion, and to create a more equitable playing field for minorities. In interviews with BoF, 14 current and former employees said things only got worse.
For fashion’s private market investors, deal-making may provide less-than-ideal returns and raise questions about the long-term value creation opportunities across parts of the fashion industry, reports The State of Fashion 2024.
A blockbuster public listing should clear the way for other brands to try their luck. That, plus LVMH results and what else to watch for in the coming week.
L Catterton, the private-equity firm with close ties to LVMH and Bernard Arnault that’s preparing to take Birkenstock public, has become an investment giant in the consumer-goods space, with stakes in companies selling everything from fashion to pet food to tacos.