Last week rumors surfaced that J.Crew was considering an IPO (initial public offering) later this year. It came as a bit of a shock to the fashion business community because J.Crew, which first went public in 2006, went private again in 2011, with private equity firms TPG Capital and Leonard Green & Partners buying the company in a $2.8 billion sale. The latest J.Crew rumor? Fast Retailing, Asia’s biggest clothing retailer (its crown jewel is Uniqlo) is now in talks to acquire the popular brand.
Bloomberg is reporting that talks are in the early stages, and could value J.Crew at as much as $5 billion. Sources close to the deal say Tadashi Yanai, Japan’s richest man and Fast Retailing’s CEO, sees J.Crew as a way to expand his company oversees, particularly in the U.S., quickly. Uniqlo is little known in the U.S. outside of New York City, where it opened a flashy glass flagship in 2012. As of February, J.Crew, operated 330 retail stores, the majority of them in the U.S., according to its website, making the brand a prime opportunity for Fast Retailing to realize its ambitions in the American market in one fell swoop.
Yanai has made his drive to dominate the U.S. market clear for some time. English is the official language of Fast Retailing, based in Yamaguchi, Japan. The company recently acquired the brand Theory, as well as Helmut Lang. And it’s repeatedly stated that it aims for Uniqlo sales overseas to be greater than domestic revenue by 2016.
Why does all of this matter to the average J.Crew shopper? Should Fast Retailing buy J.Crew, it’s hard to imagine current CEO and Chairman Millard “Mickey” Drexler staying on in his current capacity. And while Jenna Lyons, J.Crew’s President and Executive Creative Director, gets much of the public’s credit for the look of J.Crew, it would be unwise to underestimate Drexler’s impact. The CEO is somewhat of a legend for his attention to detail—and has played a role at J.Crew in everything from sourcing fabrics at mills in Italy to painstakingly merchandising the company’s stores.
A J.Crew without Drexler would likely look very different. The flip side is that Uniqlo has proven to be a company that values high design that’s affordable, as evidenced by collaborations with the likes of Jil Sander and Suno.
Fast Retailing’s stock rose 1.2 percent on the Tokyo Stock Exchange today, which has analysts suggesting that investors are already welcoming this possible J.Crew purchase. Watch this space.