(Filed Under Financial and General Interest News). Sycamore Partners, the private equity firm, could soon become an even more prominent force in intimate apparel. Earlier this month the Wall Street Journal, New York Times and other sources reported that Chico’s FAS, the women’s clothing retailer and owner of Soma Intimates, might be close to a sale to Sycamore.
Sycamore already has investments in several retailers with significant intimate apparel offerings and Soma itself operates over 280 lingerie stores and is projecting “600 plus” lingerie stores in its future according to Chico’s executives. Also intriguing is the insight Sycamore must have gained about the operations of Victoria’s Secret when it recently bought a major apparel sourcing company from L Brands, Victoria’s Secret’s parent.
The potential price tag for the sale of Chico’s to Sycamore was estimated at “upward of $3 billion” by the Times. Chico’s has not commented on the stories and a sale might not occur or other suitors might come forth. Last summer it was first reported that Chico’s was considering the option of a private equity buyout or some type of takeover.
Sycamore was founded in 2011 and the same year acquired a 51 percent controlling interest in Mast Global Fashions, (now called MGF) the third-party apparel sourcing division of L Brands. It is completing the purchase of the remainder of MGF this year. At the time of the initial investment it called MGF “one of the largest apparel sourcing, manufacturing, and supply chain companies in the world.” L has retained its “separate sourcing operation for their intimate apparel and personal care/beauty businesses.”
In 2013, Sycamore acquired Hot Topic (which includes both Torrid and Blackheart lingerie), a prominent retailer of apparel and intimates with a total of 800 stores in the U.S. and Canada. Sycamore also has a non-controlling investment in Aeropostale, which sells apparel and underwear to young women in over 1,000 stores in the U.S., Puerto Rico, and Canada.
The private equity firm also acquired Jones New York in 2014. It was widely reported that Isaac Dabah, CEO of Delta Galil (the $1 billion intimate apparel giant) had been interested in making that acquisition but had lost out to Sycamore.
L Brands, by comparison, operates 1141 Victoria’s Secret and PINK stores in the U.S. and Canada as well as 146 La Senza lingerie stores in Canada, according to figures released at the start of this year.
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