Blog: Leonie BarrieTalbots finally finds J Jill buyer

Leonie Barrie | 9 June 2009

The sale of Talbots’ J Jill stores to private equity firm Golden Gate Capital, and Filene’s Basement to a unit of Men’s Wearhouse, in the space of just two days has raised hopes for the troubled US retail market.

After all, the fact several companies were vying to buy each of the retail chains suggests they still see potential for the loss-making formats and are confident they will be able to breathe new life into their investments. And while some store closures and job losses are an inevitable casualty of the deals, it is also worth noting that the new owners have promised to safeguard the vast majority of positions at the two store groups.

That said, there is also relief that Talbots has finally offloaded the white elephant it bought following a bidding war in 2006. The $75m deal announced yesterday falls way short of the $517m paid by Talbots just three years ago, and suggests the women’s wear chain was prepared to sell its J Jill unit at almost any price.

But however much money it lost on the sale, it is now free to focus on trying to turn around its core Talbots chain without the distraction of a second drain on its finances.

The retailer has already suffered more than most from the slowdown in consumer spending as it tried to refocus on its 35-plus customers. It has closed its kids', men's, and UK shops, axed 370 jobs in February, reduced working hours, changed employee benefits, cut overheads and closed stores, and intends to halve capital expenditure this year.

But even so, progress has been slow. Today the retailer unveiled plans to cut its workforce by a further 20% after swinging to a first quarter loss of US$18.8m, but said it was making “steady progress” on its turnaround.

In contrast, over the last five years Golden Gate Capital has completed around 20 multi-channel retail acquisitions – including Express – totalling in excess of $3.5bn in annual revenues. It’ll be interesting to see how it plans to build on the potential of the J Jill brand as an independent company.

 


BLOG

just-style market research sale

Are you planning for the year ahead and beyond? Well this week we’re offering great deals on some of our market research......

BLOG

Gearing up for the holiday shopping season

The volume of US apparel imports saw an increase in October on the prior year as retailers geared up for the holiday shopping season. Bangladesh booked the second highest growth behind India, reversin...

BLOG

Innovations to boost sustainability

Hong Kong-based textile and apparel giant Esquel Group, the world's largest woven shirt maker, is pushing ahead with the pursuit of sustainable and holistic quality. ...

BLOG

Sign up to try new re:source apparel sourcing tool for free

The old saying "Good things come to those who wait" is certainly true for re:source, the new suite of data-driven sourcing tools being developed by the team here at just-style....

just-style homepage



Forgot your password?