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Fast Retailing, E.Land interested in buying J.Crew: sources

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[March 01, 2014]  By Soyoung Kim and Olivia Oran

NEW YORK (Reuters) - Uniqlo parent Fast Retailing Co Ltd <9983.T> 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 on Friday.

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 people said.

It was not yet clear whether either Japan's Fast Retailing or South 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 person said.

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 its potential exit, the people familiar with the matter said.
 


All the people asked not to be named because the matter is not public.

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. The Japanese retailer approached J.Crew's management this week about potentially buying the company, the report added.

Discussions about a potential sale come as J.Crew is weighing a return to the stock markets as soon as this year. The retailer is working with Goldman Sachs Group <GS.N> as it mulls a stock market listing, the person familiar with the matter said.

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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 buyout.

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 website.

In the fiscal year ended February 1, J.Crew's revenues increased 9 percent to more than $2.4 billion while adjusted earnings before interest, tax, depreciation and amortization rose to as much as $371 million, compared with $360 million in the prior year.

(Reporting by Soyoung Kim and Olivia Oran, Additional reporting by Greg Roumeliotis and Christian Plumb; Editing by David Gregorio, Diane Craft and Lisa Shumaker)

[ 2014 Thomson Reuters. All rights reserved.]

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