J.Crew's charismatic CEO, Mickey Drexler, has engineered a deal to sell the brand to private equity firms TPG Capital and Leonard Green & Partners for a whopping three billion dollars, as reported by The New York Times' blog, Dealbook.
Dealbook reported yesterday that Drexler was close to a deal, and that it turns out that they were correct in their report of the parameters of the deal (though the initial figure of the sale was closer to $2.8 billion). Drexler will continue to spearhead the brand, working with the private equity firms.
Drexler, along with the newly-installed president of J.Crew, Jenna Lyons, have guided the brand to a spectacular renaissance since Drexler was installed in 2003. The brand has expanded both in terms of its locations (even opening up specialty bridal and menswear shops in New York) and its wares, upping the creative ante on its in-house line, boosting its bridal offerings, and forging partnerships with iconic labels like Belstaff and St. James.
It turns out, however, that J.Crew's earnings have actually dropped steadily this year, which may indicate why Drexler -- who was reportedly ousted from his position at Gap in 2002 after sales declined -- would be interested in a deal at this moment. Fashionista has also reportedly heard from inside sources that, while the men's division has reported steady growth, the womenswear section has stalled.
In an interesting twist, the new deal would actually reunite TPG with Drexler: TPG recently sold off the last of its stake in J.Crew, but is apparently interested in much more now. (Drexler is also, according to the report, one of the biggest shareholders in the company.)