J Crew takeover

Discussion in 'Classic Menswear' started by sajohnson05, Nov 23, 2010.

  1. sajohnson05

    sajohnson05 Senior member

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  2. mack11211

    mack11211 Senior member

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    CEO Drexler is part of the deal. He made J Crew what it is in recent years. So long as he's' in charge, they should do the same things in the same way.
     


  3. patrickBOOTH

    patrickBOOTH Senior member Dubiously Honored

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    CEO Drexler is part of the deal. He made J Crew what it is in recent years. So long as he's' in charge, they should do the same things in the same way.

    It's good for me because I am a shareholder. They made me some money in the last few years. [​IMG]

    I am pro private companies. Issuing public equity is so expensive I can't see why many companies do it.
     


  4. GusW

    GusW Senior member Dubiously Honored

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    It all depends upon their strategy. If they leave the creative visionaries alone, it will be fine. But if they go and try to bleed every last dollar out of the creative departments to enhance short term profits then the product will be marginalized and eventually fade.

    Unfortunately, private equity firms will often do the latter.
     


  5. Icarus

    Icarus Senior member

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    It's good for me because I am a shareholder. They made me some money in the last few years. [​IMG]

    I am pro private companies. Issuing public equity is so expensive I can't see why many companies do it.


    Access to capital markets and credibility. Private Co.s can have both, but being a public company provides liquidity and growth prospects to "smaller" companies.
     


  6. Icarus

    Icarus Senior member

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    It all depends upon their strategy. If they leave the creative visionaries alone, it will be fine. But if they go and try to bleed every last dollar out of the creative departments to enhance short term profits then the product will be marginalized and eventually fade.

    Unfortunately, private equity firms will often do the latter.


    Yes, it's all about an exit. TPG was the founders' exit, ECM/IPO was TPG's exit, etc.

    It's obvious J. Crew will be public again.
     


  7. gdl203

    gdl203 Affiliate Vendor Dubiously Honored Affiliate Vendor

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    I believe that several of SF darling brands are owned by PE shops. Filson comes to mind.
     


  8. gdl203

    gdl203 Affiliate Vendor Dubiously Honored Affiliate Vendor

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    Issuing public equity is so expensive I can't see why many companies do it.
    What do you mean by this? Do you mean public company costs (additional reporting, legal costs, etc...)?
     


  9. Icarus

    Icarus Senior member

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    What do you mean by this? Do you mean public company costs (additional reporting, legal costs, etc...)?

    Most naysayers complain about initial compliance and ongoing costs. Sarbanes-Oxley compliance is not that much more expensive but it has certainly generated a lot of backlash. I guess it has hurt smaller companies trying to get listed in the US since so many are going to Toronto and London for that. Maybe he means the underwriting fees.
     


  10. gdl203

    gdl203 Affiliate Vendor Dubiously Honored Affiliate Vendor

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    Most naysayers complain about initial compliance and ongoing costs. Sarbanes-Oxley compliance is not that much more expensive but it has certainly generated a lot of backlash. I guess it has hurt smaller companies trying to get listed in the US since so many are going to Toronto and London for that. Maybe he means the underwriting fees.

    Agree - costs could be heavy for micro-caps but don't move the needle for a large company like J Crew.

    Maybe he did mean the fees...

    That said, on a more fundamental basis, public investors require lower returns than private equity ones. So on a pure CAPM basis, the cost of equity of a public company is lower than that of a PE owned one.
     


  11. furo

    furo Senior member

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    I frequent J Crew often enough, but the only thing I've ever bought was their messenger bag. The rest of their product is just meh for the pricing.
     


  12. Nicola

    Nicola Senior member

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    I guess it has hurt smaller companies trying to get listed in the US since so many are going to Toronto and London for that. Maybe he means the underwriting fees.

    If you mean miners they've always listed TSE or before that VSE. To a lesser extent London.

    It's nothing to do with costs. Cdns always have a certain love of miners. VSE with it's small caps ranged from lottery players to crooks [​IMG]
     


  13. JayJay

    JayJay Senior member

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    I frequent J Crew often enough, but the only thing I've ever bought was their messenger bag. The rest of their product is just meh for the pricing.
    I'm not as impressed with them as I used to be. Lately I just quickly walk through their stores, and leave underwhelmed and empty-handed.
     


  14. madmadigan

    madmadigan Senior member

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    It all depends upon their strategy. If they leave the creative visionaries alone, it will be fine. But if they go and try to bleed every last dollar out of the creative departments to enhance short term profits then the product will be marginalized and eventually fade.

    Unfortunately, private equity firms will often do the latter.


    Exactly
     


  15. joneog

    joneog Well-Known Member

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    Or put another way: it's easier to sell the public (or their agents) over-priced garbage. PE guys a bit more discerning.
     


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