J.Crew Is Looking at Separating Madewell -- WSJ

By Khadeeja Safdar 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (April 12, 2019).

J.Crew Group Inc. said it is considering splitting off its Madewell brand into a public company, separating the smaller but faster-growing apparel chain from its preppy parent.

The retailer said it was conducting a strategic review of its business and could complete an IPO of Madewell as soon as the second half of 2019. Madewell, which was founded in 2006 by former J.Crew CEO Millard "Mickey" Drexler, sells clothing targeting younger shoppers.

Madewell sales rose 26% to $529 million last year, while sales fell 4% at the J.Crew brand to $1.78 billion.

J.Crew, which is controlled by private-equity firms TPG and Leonard Green & Partners, is carrying about $1.7 billion of debt and has been struggling with slumping sales for several years.

The plan to break up would follow a similar decision by rival Gap Inc., which recently announced plans to split off its Old Navy business into a separate public company.

J.Crew also said Thursday it had selected Michael Nicholson, its president and chief operating officer, as interim chief executive. His appointment follows the departure of CEO James Brett in November.

Write to Khadeeja Safdar at [e-mail]

(END) Dow Jones Newswires

April 12, 2019 02:47 ET (06:47 GMT)

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