J. Crew’s rumored IPO

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Back in early 2000s when I was in yachting, J. Crew was (probably still is) the go-to for the typical yachting uniform of white shirts and khakis. In a word, boring – unless preppy is the height of your sartorial taste.

Then, a few years ago in late 2010, a twenty something cousin of mine who dresses more hipster than preppy mentioned that J. Crew was her absolute favorite brand. Being in Montreal, Canada where the brand is absent meant I had to visit the store online to see what she meant.

Sure enough, the J. Crew that I knew was transformed: young, on-trend and completely wearable beyond Nantucket and the Hamptons. These changes could largely be credited to the leadership of Jenna Lyons as creative director and Millard “Mickey” Drexler as CEO. I remember Jenna Lyons as the one who wore a sweater and a maxi feather skirt to the 2011 Met Gala. If that’s not the epitome of cool and owning it kind of style, I don’t know what is. Fast forward to today and J. Crew has only grown bigger and has garnered a cult following. More importantly, that cult following translates to $2.4B in revenue last year, a 9% increase and a valuation of $5B.

If J. Crew IPO’s with the partnership of Lyons and Drexler intact, I would certainly bet on its success. But, there’s also a possibility that J. Crew is not going to IPO at all and instead get acquired at its current valuation by Japan’s Fast Retailing, the parent company of Uniqlo. Either way, it would be a nice exit for TPG Capital and Leonard Green & Partners who bought J. Crew for $2.8B in 2011. I’m wondering though, would an acquisition adversely affect J. Crew’s current leadership structure and company culture? Not to say that Fast Retailing does not know fashion. Its brands: Uniqlo, Helmut Lang, Theory, etc. have themselves good followings. Still, it would be interesting to see how this works out.



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