Shareholders Approve J. Crew Deal

Mar 02, 2011 8:18 PM  By

Now, it’s actually over. The deal that started back in November when the J. Crew Group announced it was being acquired by funds affiliated with TPG Capital and Leonard Green & Partners for $43.50 per share in cash, or a total of nearly $3 billion, has finally been approved.

At a special March 1 meeting, stockholders approved the previously announced merger agreement with Chinos Holdings and Chinos Acquisition Corp, which are affiliates of TPG Capital and Leonard Green & Partners.

The transaction is expected to close on or around March 7, 2011.

Neil Stern, a retail analyst and senior partner for retail consultancy McMillan Doolittle, says recent private-equity buyouts apparel cataloger/retailer firms suggest that private investors believe this sector to be under-valued on Wall Street.

“Most specialty retailers struggled in the recession with J. Crew being no exception,” Stern says. “Private ownership will allow them more strategic flexibility while being out of the public spotlight. While J. Crew has been a well managed company, we would expect to see more clarity around growth strategies, particularly around multichannel and determining future growth formats. They have played around with Madewell and Crewcuts.”

In 2006, J. Crew introduced Madewell, a modern-day interpretation of an American denim label founded in 1937. Targeting women ages 18 to 40, Madewell has a flagship store in New York City and 17 other stores nationwide. Madewell’s ecommerce site launched last summer.

Crewcuts caters to children’s sizes 2-14.