Sycamore Partners close to acquisition of Jones Group Inc- sources
Sources told Bloomberg that private equity company Sycamore Partners is close to arriving at a deal to acquire Jones Group Inc. The two people told the news outlet that the purchase price would be $15 per share, bringing the value of the retailer to around $1.2 billion. The people spoke on the condition of anonymity since the process is private. One source said an announcement about the deal may be made next week.
The report said New York-based Sycamore which looks for opportunities in the retail market, had earlier partnered with another private equity firm KKR & Co, to make a joint bid for Jones Group. However, KKR & Co dropped out of the race, the report said. Five months ago, sources also told Bloomberg that Jones Group had engaged the services of Citigroup Inc to review options, including a sale, for the company which owns the fashion brands Jones New York and Nine West.
The report said that in the past few years, Jones Group has been challenged to revitalize the women's sportswear brand Jones New York sold in Macy's Inc and other mid-priced department stores. The company's premium brands, like Stuart Weitzman, have done better. Jones Group also offers clothing and footwear under brands like Anne Klein and Rachel Roy.
Citing people familiar with the matter, the report said possible buyers for the firm, including G-III Apparel Group Ltd and other private equity firms preferred to cherry pick the better-performing brands of Jones Group instead of acquiring the entire company. Analysts have estimated that the adjusted earnings per share of Jones Group will fall for the fourth consecutive quarter in the holidays. They also forecast that the firm's revenue will drop 6% after its 9% increase last year.
Meanwhile, Sycamore Partners was established two years ago by two Golden Gate Capital Corp executives. According to its website, it has over $1 billion in capital under management.