I tried.
Pretty sure most #privateequity shops are buying mall-focused retail cos so Kravis, Schwarzman, Rubenstein, & Coulter can reenact Mean Girls
The PE Reader
@PE_Feeds
Pretty sure most #privateequity shops are buying mall-focused retail cos so Kravis, Schwarzman, Rubenstein, & Coulter can reenact Mean Girls
Back on May 23, private equity firm Apax Partners (fresh of its recent acquisition of luxury shoe retailer Cole Haan) made an offer for teen retailer Rue21. With 934 store locations in 47 states, it's strong in its class and represents the recent deal in a string of mall-focused consumer retail acquisitions by the PE industry.
Other prominent deals include:
Billabong (Altamont OR Sycamore, TBD, Q3 or Q4 2013)
online.wsj.com
Atamont Capital Partners and VF Corp. was battling with Sycamore Partners and Paul Naude (Billabong's former U.S. operations head), and this week the deal talks fell apart and they are discussing refinancing and asset sale deals.
It's been a long hard fall for Billabong (which rejected an almost $800MM deal from TPG and bungled ~$300MM deals from both Altamont and Sycamore), but according to my sources, don't expect deal talks to be 100% dead.
UPDATE: The assets are up for sale.
True Religion (TowerBrook Capital Partners, $835MM, May 2013)
dealbook.nytimes.com
In a deal that started really back in October 2012 (when True Religion hired Guggenheim to look for buyers), it seems to make complete sense when the former owner of Jimmy Choo (and somehow the bane of Tamara Mellon's existence - they made her quite a lot of money in the end) announced a deal with a 9% premium to the company's May 9 closing price.
"30% Net IRR? 2Gud 2B True" on a hot pink graphic T.
Laura Kreutzer
@LauraKreutzer
"30% Net IRR? 2Gud 2B True" on a hot pink graphic T.
Hot Topic (Syamore Partners, $600MM, March 2013)
online.wsj.com
In a $600MM cash deal, Sycamore Partners (which has its roots in the retail industry; it picked up another company on this list last year) put a 30% premium to Hot Topic's March 6 closing price.
Aeropostale (TBD, March 2013)
businessoffashion.com
The retailer has been having recent difficulty and, as the Bloomberg piece says, its lack of debt is a great opportunity for PE shops focused on distressed retail like Golden Gate Capital and Sycamore Partners as well as larger shops. The rumor has it that at least 3 buyers were looking hard at the company.
Talbots (Sycamore Partners, $369MM, May 2012)
dealbook.nytimes.com
Man, when is a $2.75/share deal a 113% premium? When it's Talbots, which has struggled mightily as Sycamore circled the clothing retailer. What is amazing about the deal is that the new chief executive, Michael Archbold, came from another PE-backed company (Vitamin Shoppe, where he was President and COO). The new President, Lizanne Kindler, came from Kohl's (VP Product Development) and had worked at Talbots at EVP of Merchandising before her move to Kohl's.
PacSun (Golden Gate, $60MM loan, December 2011)
dealbook.nytimes.com
While it's not exactly an investment deal, Golden Gate did put 2 of its executives on PacSun's board. While the teen retailer closed 175-200 of its stores, it's made a sort of a recent comeback...
insight from PacSun earnings call: gurls are buying more high-rise shorts and thus more crop tops to go w/those. $psun #pacsun #teenlingerie
Sapna Maheshwari
@sapnam
insight from PacSun earnings call: gurls are buying more high-rise shorts and thus more crop tops to go w/those. $psun #pacsun #teenlingerie
J. Crew (TPG Capital & Leonard Green, $3B, November 2010)
dealbook.nytimes.com
In an epic battle filled with go-shop period extension, Urban Outfitters taking a second look at the deal (and threatening with a bid), and an $18MM investor lawsuit, J. Crew got taken private again in 2011 with a $43.50/share deal, which was a 16% premium from the closing price marked.
The funny thing about J. Crew is that back in the early 2000s which Mickey Drexler was forced out of Gap, Jonathan Coulter (one of the heads of TPG Capital and had owned J. Crew at the time) immediately grabbed lunch with the ex-CEO and put him at the helm of J. Crew a few weeks later.
(There's a great CNBC documentary on the retailer by David Faber if you haven't seen it yet.)
J. Brand (Star Avenue Capital, N/A, February 2010)
businesswire.com
As far as I understand, Star Avenue Capital still has a stake in the jeansmaker, but back in November 2012, Fast Retailing (Uniqlo, Theory, Comptoir des Cotonniers) planned to take an 80% stake for around $290MM.
And a few really old ones...
The Limited (Sun Capital Partners, $50MM loan + $75MM line of credit, August 2007)
marketwatch.com
The Limited broke off from its parent co Limited Brands through a deal with Sun Capital Partners. Sun still owns the business, and the full cut ties from Limited Brands were back in 2010. which is also looking heavily at outlet stores to complement malls.
Spencer's Gifts (ACON Investments, N/A, August 2007)
dealbook.nytimes.com
ACON acquired the retailer from GB Merchant Partners, the PE arm of Gordon Brothers Group (which focuses on distressed or dying companies.) It's had some IPO/sale rumors recently but nothing solid at this point.
So why in the world would private equity push hard into teen retailers? The answer is simple...
@LauraKreutzer @PE_Feeds Tweens are a legit market. Semi-independent buying choices, easy to ask parentals for money.
Aphinitea
@aphinitea
@LauraKreutzer @PE_Feeds Tweens are a legit market. Semi-independent buying choices, easy to ask parentals for money.
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