J CREW BUY OUT

Take heed LL BEAN SIGNATURE and any stores trying to keep up with the mainstream. If you call yourself preppy then stick to what preps have always loved, the tried and true. After all, isn't that one thing you can count on with us? We just don't change. Change is not always good as seen by the conservative, preppy shopper. J crew which began as a preppy staple has lately been seen by die hards as edgy and mainstream, i.e. Selling out. I too have noticed lately that the clothing has changed. The cuts are narrow, a little too narrow. Almost MOD in appearance. If I wanted that I would simply go to a mall. How dreadful. Anyway, enough of the soapbox, here are the details via CNBC.

J Crew said on Tuesday that it had agreed to be bought out by two private equity firms,
including its former parent, for about $2.86
billion, although some analysts and others think
the upscale apparel retailer company could
command a higher bid. Under the proposed deal, TPG group and Leonard Green & Partners would buy the company for $43.50 a share. That is a 16
percent premium to the stock's closing price of
$37.65. Millard Drexler will continue as chairman and
chief executive officer and maintain a
significant equity investment in J Crew. The preppy retailer, which sells upscale
apparel for men and women, has a market
capitalization of around $2.3 billion. The
company went public if 2006. Shares [ JCG 43.99 +0.00 (+0.00%) ] rose 17 percent in premarket trading before being
halted. TPG took a majority stake in J Crew Group in
1997 and remained majority shareholder until
the company went public in 2006. The investor group has secured committed
financing from Bank of America Merrill Lynch and Goldman Sachs. The deal would include a so-called "go shop"
window that would allow J Crew to solicit
superior offers, sources said. The go-shop
period would last through the holidays, sources
said, allowing potential suitors to see how the
retailer performs through the crucial holiday shopping period. The agreement permits the Special Committee
to solicit, receive, evaluate and enter into
negotiations with alternative proposals through
January 15, 2011. Private equity buyouts are rising after a lull
during the recession. Gymboree in October agreed to be bought by Bain Capital for $1.8 billion. The New York-based retailer, which had
outperformed most retailers earlier this year,
shocked the market in August when it cut its
2010 outlook, citing "nervous" shoppers and
promotions by competitors. On the earnings front, J Crew reduced its full-
year profit forecast to a range of $2.08 to $2.13
a share from $2.25 to $2.35, citing the still-
wavering consumer sentiment. In the latest quarter, net income fell 14 percent
to $37.8 million, or 58 cents a share, from $43.9
million, or 67 cents a share, a year ago.
Analysts, on average, expected earnings of 54
cents a share. Revenue increased 4 percent to $429.3 million
as same-store sales declined 1 percent.
Analysts polled by Thomson Reuters had
forecast $430 million.


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