Originally Posted by Willin
It's simply a play for the PE firm to cash out while the getting is still good and they have a suitor. They couldn't give a damn who they sell to. The CEO probably knows the writing is on the wall for the AE brand if they sell to MW but he has little say in the matter.
Yes, but businesses with a strategic interest are willing to pay a premium. My point is that MW probably doesn't have a strong enough strategic play to buy AE to justify much of a premium, so there is a possibility someone else will offer more.
Originally Posted by JLibourel
That raises the question of whether MW would become the exclusive retailer of A-E. For instance, as of a few years ago (not sure whether this is still true), the amount of shoes A-E sold to Nordstrom alone equalled Alden's total production. Would the new ownership be willing to give up that and much other business? And what about all the A-E company stores and outlets? Somehow, I think the management of MW are shrewd enough to realize that the typical A-E customer and the typical MW customer are two rather different animals.
They are; however, there are two problems in that scenario.
1. Brands that focus on price or cost containment tend not to do well when they acquire higher end brands. How many times have we seen that?
2. Companies that tend to try doing two different retail strategies often don't do well with the non-primary one. As an example, Sam's Club has done okay but not great while Costco has boomed.