That being said, an interesting piece came into DealBook today: Sears and Urban Outfitters have been looking at J.Crew's books and are seriously considering counter-bids to the original bid made by TPG and Leonard Green. Here are some quick thoughts to why both are thinking about bids:
- Sears: With many of its brick-and-mortar stores losing customers along with a lack of strong product portfolio, Sears hasn't been able to attract people to brands like its competitors Target and Kohl's (Target moreso) have been; Target's been able to have low-price collections with high-end designers. Two pros come out of the potential bid:
- By acquiring J. Crew, Sears can promote to consumers that they now carry J.Crew merchandise; their main stores are in rural towns where J.Crew has no footing, so it's a potential win-win for both companies.
- Moreover, Sears has to have a few small but strong brands (which I cannot name since, well, I don't any - I don't go to Sears, haha) that could sell in J. Crew stores.
- Urban Outfitters: UO has really changed from the "go-to store for hipsters" to a store that carries a bunch of nice and affordable clothes and cool accessories. I say "cool" because they sell random things like coffee table books, drinkware, and home items. With their collection of those brands, I see collaboration with UO and J.Crew to introduce their brands to the other's stores.
- My only problem with UO though is what DealBook mentioned: they have a strong management team that may force Mickey Drexler out. While UO has been very good at building up their brand, stores, and company, you can't force him out of the board.