Talbots, Inc. wants to sell its J. Jill line of apparel, shoes and accessories. DealBook reports that Talbots acquired J. Jill two years ago and outbid Liz Claiborne for the women's clothing brand.
Most everyone has purchased an expensive fashion item, only to discard it a few seasons later. That seems to be what happened with Talbots, the women's clothing chain. It said Thursday it would seek to sell its J. Jill unit just two years after buying it for $518 million in cash.
To win J. Jill, Talbots had to top a competing offer from Liz Claiborne, another purveyor of high-end women’s apparel. It ended up paying $24.05 a share, far above the $18 a share, or $366 million, that Liz Claiborne had offered a few months earlier.
To help pay for the deal, Talbots took out a $400 million loan facility, regulatory filings show.
The purchase price may have been too high and Talbots has been dissapointed with J. Jill's sales. The Boston Globereports that if no buyer is found J. Jill could be closed.
Retail analysts say it will be difficult in this environ ment for Talbots to find a buyer willing to purchase a struggling retail chain - and one with enough cash to finance the deal in these tight credit markets. Some observers suggested holding companies, such as VF Corp. or Kellwood Co., might be interested in J. Jill, though it remains a tough sell. VF, which owns brands such as Nautica and Lee, and Kellwood, which runs Sag Harbor and Calvin Klein brands, did not return messages seeking comment. If no buyer comes forward, J. Jill, with about 3,800 employees and 282 shops, could be closed.
The Boston Globe also says that Talbots chief executive Trudy F. Sullivan is confident they will be able to find J. Jill a new home.
