By  on August 23, 2005

NEW YORK — J. Jill Group, the multichannel specialty retailer of women's apparel, is for sale and Urban Outfitters Inc. might be among the potential buyers, financial and market sources said.

J.P. Morgan Chase is said to be the investment bank circulating the prospectus, or book, containing financial information about the retailer's operations, which include retail, catalogue and the Internet. A banker for J.P. Morgan declined comment.

The asking price for J. Jill could not be immediately determined. Analysts and portfolio managers often use a one-times sales formula that provides an estimated price per share. An analyst's estimate of $513 million in sales for fiscal year 2006, divided by 21 million shares outstanding based on the firm's most recent quarterly report, would bring in a per-share price of $24.40. Using the sales volume of $454 million from fiscal year 2005, would give a lower per-share range of $21.60. Shares of J. Jill closed Tuesday at $17.57, up 63 cents, in over-the-counter trading.

"We've heard that,'' Urban Outfitters chief financial officer John Kyees said when asked about a purchase of J. Jill. "There's been no discussion. We constantly get these suggestions from market people about the possibility for acquisition. We've never done an acquisition for 35 years, but you never know."

An executive at Urban Outfitters, who asked not to be identified, said the company "thinks J. Jill is an interesting business." In addition to its core nameplate, Urban also operates the Anthropologie and Free People retail concepts.

Olga Conley, the cfo of Quincy, Mass.-based J. Jill, could not be reached for comment.

The idea of J. Jill and Urban connecting appeared to have originated with Marvin Traub, the former Bloomingdale's chairman who heads Marvin Traub Associates Inc. He suggested the firms might be a good fit. "Both companies have a very dedicated customer base across the country,'' Traub said. "Each has a different age group, but there's a kind of casualness that seems to fit both companies."

A financial source not connected with either retailer, but familiar with the rationale behind why Urban might want to buy J. Jill, said: "Urban can fine-tune the merchandise at J. Jill and have another channel for customers who have outgrown Anthropologie. They can take the best from Free People and Anthropologie and incorporate it into J. Jill."

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