J. Crew Goes Private; Sold for $3 Billion

J. Crew announced today that it's officially going private. There has been a lot of talk about this buyout, which sold for $3 billion to two private equity firms, Leonard Green & Partners and TPG Capital.  Despite their popularity among women across the country, including the First Lady, sales in the last year have been slow (mostly women's sales; men's sales have, in fact, gone up), therefore going private will allow them to stay out of the public eye while they fix what's broke. The company will remain under the control of CEO Mickey Drexler, who, before this slump, was known for reviving the J. Crew brand along with Jenna Lyons. He's also well known for transforming GAP into an industry leader during his tenure . On a side note, can someone please explain the Valentino and GAP collaboration. Valentino ruffles on military khakis?  Really?

“It is a clear endorsement of J.Crew and of the hard work and commitment of each and every one of our associates,” Drexler said in a statement. “As I have always said, we are in this for the long term and we do what we do day in and day out so we can deliver the best possible products to our customers.”

Over the weekend, I was discussing with a friend how we've noticed the price point for J. Crew has increased over the past year.  Although I love their clothing I was starting to feel more and more ambivalent about their style, which has recently remained stagnant instead of being on trend.  So, because of that, I started only buying from the sales section, in-store and online, since those prices seemed more reasonable. As I read the CNN article this morning, Brian Sozzi, equity research analyst at Wall Street Strategies, was quoted saying just that, "It really drills down to the women's assortment," Sozzi said. "It's just a little off trend from what we've seen in the past and items have gotten a little pricier, which might be causing consumers to look elsewhere in the mall."

I still do love their new Spring 2011 collection but might have to wait till it goes on sale.  In the meantime, I think I'll start shopping more at their sister store, Madewell.