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Is Urban Outfitters the Next J. Crew?

Wall Street Strategies submits:

By Brian Sozzi

Undoubtedly, the $3.0 billion buyout of J Crew (JCG) by TPG and Leonard Green came as a surprise to many. Conventional wisdom when it applies to private equity and retail sector transactions has long held that a suitor steps in and buys a fixer upper. Once in, private equity stabilizes operations and closes a multitude of unproductive stores in order to recoup the premium paid up front. At least this line of thinking materialized in the retail M&A boom of 2005-2007. However, there is the emergence of a new theme pertaining to private equity and retail, and that is to buy known quality that is being mispriced by a short-term minded market (besides, who wants a broken business

By admin posted about 1 year ago
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