The bidding for True Religion Apparel Inc. is heating up, and sources said private equity firm Sycamore Partners has the lead.
The sale process is still in the “early stages,” according to one source familiar with the process. Two other sources also said Sycamore has jumped into the lead.
One source warned that while the discussions have deepened between Sycamore and True Religion, the talks could still break apart.
Another source in the financial community said names of other interested bidders include Los Angeles-based Gores Group, which owns J.Mendel and has a stake in Mexx, and South Korean fashion conglomerate E-Land Group, which bid on Collective Brands Inc. earlier this year.
Executives at Sycamore and Guggenheim Securities, the financial adviser to True Religion, could not be reached for comment Wednesday.
It’s been a busy sector. Fast Retailing Co. Ltd. last month acquired an 80.1 percent stake in L.A.-based denim and fashion brand J Brand Holdings LLC from Star Avenue Capital and J Brand management for $290 million plus $10 million in advisory fees. In July, private equity firm TSG Consumer Partners took an undisclosed stake in Paige Denim.
While Not Your Daughter’s Jeans had been on the auction block since a year ago, the company has been taken off the market.
David Moross, chairman and chief executive officer of Falconhead Capital, said, “Falconhead Capital has been very happy with our investment in NYDJ, and while we considered offers to sell, we decided to retain our ownership and reinvest in the continued growth of the brand.”
Falconhead acquired a 50 percent stake in the brand in 2008 for $100 million. Strategic buyers are said to have been pitched late last year, although no deal materialized. At least one investment banker in the retail and apparel space said an issue with NYDJ is that it is a brand that is functional-focused in terms of its trademarked Lift Tuck Technology for Baby Boomers, and not fashionable enough for buyers who are seeking good brands in the contemporary market.
Moross disputed that, noting the women’s denim brand has had consistent, double-digit growth in wholesale and at retail in the department store level.
“We believe that we have numerous worldwide opportunities, including new product categories, distribution channels and international territories, and we are focused on maximizing the brand’s huge potential,” the Falconhead chairman said.
True Religion said in October it had formed a special committee to explore strategic alternatives after “indications of interest” from third parties. Market and financial sources said the company put out feelers in the summer to test the waters. First-round bids were received in the last week of November.
The Vernon, Calif.-based premium denim firm last month said net income for the third quarter ended Sept. 30 grew 2.1 percent to $12.3 million, or 49 cents a diluted share, on a 9.4 percent gain in net sales to $118.5 million.
Manhattan-based Sycamore Partners in August closed on its first fund, and now has more than $1 billion in capital under management.
Sycamore’s first deal, in November 2011, was a 51 percent stake in Limited Brands Inc.’s sourcing division Mast Global. That was followed in May with the announcement that The Talbots Inc. had finally agreed to be acquired by the private equity firm in a transaction valued at $369 million.
Most recently, Sycamore surfaced as a potential bidder for Cole Haan, which Nike Inc. recently sold to Apax Partners for $570 million.
Whether or not it acquires True Religion, Sycamore is expected to continue to search for investment opportunities in the fashion and retail space.
Exclusive: Nicola Formichetti is parting ways with @diesel after nearly four years. Formichetti, who served as Lady Gaga’s stylist in 2009, joined Diesel in 2013 as creative and artistic director. His first show debuted in Venice with a show held at the Venetian Arsenal. #wwdfashion #wwdnews
The polo shirt - an icon of preppy style - is roaring back into fashion in many creative guises, like this A-line polyester top from @carven, worn with @31philliplim cotton and elastane pants. Designers stretched a fashion classic into all kinds of new permutations this season. See how @mayteallende styled the preppy trend on WWD.com #wwdfashion (📸 : Kinya)
(Market Editors: @andrew_shang and @elmercer, Makeup: @amandawilsonmakeup using @fentybeauty, Hair: @gonn24, Model: @bara_holotova at @women360mgmt)
“I do like period [projects] a lot because I like creating those worlds, a world that is different from today," costume designer Mark Bridges said about the '50s British couture featured in @phantomthread. Bridges created the overall aesthetic and individual fashion looks for the film, which stars Daniel Day-Lewis, Lesley Manville and Vicky Krieps. Pictured here is a gown he designed for Krieps who plays Alma – the love interest of Day-Lewis' character, Reynolds Woodcock. #wwdfashion
@prada is embracing the holiday season with a series of short movies about the art of gift-giving. "The Postman's Gifts", which was directed by American filmmaker Autumn de Wilde, focuses on the brand's signature Prada Galleria bag and features Elijah Wood as the postman. In the first two episodes, Wood's delivers the iconic bag to @emmaroberts, who plays herself as a movie star, and Sasha Frolova. #wwdfashion
“I think I never met the person while we were working,” Vicky Krieps said of Daniel Day-Lewis, who she plays the love interest of in “Phantom Thread.” Day-Lewis remained perennially in character, so much so that she feels she’s just meeting him now. “It’s interesting to see how different he is in real life to the character,” Krieps said. WWD sat down with the 34-year-old actress to talk about her new role in the period film, which brings the fifties’ gender dynamics into the mix. Read more on WWD.com. #wwdeye (📷: @lexieblacklock)
@gucci has expanded its “Places” project to include six new cities. The initiative, which was first unveiled in July, aims to invite people to explore inspirational locations for the brand. On the list is the Biblioteca Angelica library in Rome pictured here. See the other five new venues on WWD.com. #wwdfashion (📷: @massimo_listri_official)
#ad From tools to lashes, WWD rounded up wellness and beauty products guaranteed to take your skin care and makeup routines to the next level in 2018. Follow along as @laceandleatherbyelyse, @ashnfashn and @elleisalwayshere experiment with these products on their Instagram profiles and blogs. #NewYearBetterYou
Blogger @camilacoelho is one of the fastest growing beauty influencers around the world. The bilingual blogger has worked with brands like @revolve Beauty, @dior, @louisvuitton and more and has an Earned Media Value of $34,338,441, according to @tribedynamics. But Coelho isn’t the only influencer making a major impact — head to WWD.com to see the other fastest-growing influencers in six key global markets. #beautyfridays (📷: @zefashioninsider)