Arcapita Said to Be Buying J. Jill

Golden Gate Capital is believed to have struck a deal with the private equity and venture capital firm.

Golden Gate Capital is believed to have struck a deal to sell J. Jill to Arcapita Inc., a private equity and venture capital firm with offices in Bahrain, Atlanta, London and Singapore.

This story first appeared in the March 17, 2011 issue of WWD.  Subscribe Today.

Officials at Golden Gate and Arcapita were not available for comment Wednesday, but one industry source said it was a done deal.

Following the Texas Pacific Group/Leonard Green purchase of J. Crew Group this month, and LVMH Moët Hennessy Louis Vuitton’s takeover of Bulgari, reports of other retailers and brands being shopped by private equity have heated up, particularly in the specialty retailing sector.

Arcapita has been active in the consumer sector, with a current investment in Caribou Coffee and past investments in Church’s Chicken; Yakima, a supplier of vehicle racks for bicycles, boats and ski equipment, and Loehmann’s, among other companies. Arcapita owned Loehmann’s from 2004 to 2006 when it sold it to Istithmar. Typically, Arcapita buys and sells companies in the $50 million to $200 million range. Arcapita is wholly owned by the Bahrain-based Arcapita Bank and has completed investments with a total transaction value of more than $28 billion. Aside from private equity and venture capital, the firm invests in real estate and energy-, water- and transportation-related businesses, according to its Web site.

It’s only been a year and a half since private equity firm Golden Gate Capital purchased J. Jill from The Talbots Inc. for $75 million, but a deal corresponds with Golden Gate’s ongoing strategy of restructuring its portfolio of brands. Last year, it spun off Express through a successful initial public offering, but some of Golden Gate’s other brands have been struggling. In January, Golden Gate sent its Orchard Brands umbrella of 17 catalogue businesses into voluntary bankruptcy. Eddie Bauer has also been difficult, as has business at Zale Corp., the jewelry retailer, where Golden Gate has an investment.

J. Jill has been making headway with turnaround efforts being led by president Paula Bennett involving modernizing the look with a more contoured fit, still keeping it relaxed, and shedding its dowdiness. The company has also been honing a multichannel approach. Generally, the appeal is for Baby Boomers, but J. Jill executives prefer to characterize the appeal as ageless. Sales of J. Jill are estimated at around $400 million to $450 million. J. Jill was owned by Talbots from 2006 to 2009, and earlier was long owned by DM Management, which bought the business in 1987 from founders Carl and Mary Ann Lipsky.