While Sycamore Partners prepares to close on its $2.2 billion transaction to acquire The Jones Group in the second quarter, the first deal representing a sell-off of assets could be Rachel Roy.

This story first appeared in the February 18, 2014 issue of WWD. Subscribe Today.

As reported last month, brand-management firm Bluestar Alliance has been eyeing the acquisition of the Rachel Roy brand, which is still under the Jones umbrella. Sources said those talks, which were ongoing before Jones inked its deal with the private equity firm, are nearing completion. Part of the delay was due to other entities wanting to take a look at the brand, sources said. Those sources also said Bluestar has financing in place to complete the deal.

Jones has a 50 percent stake in fashion brand Rachel Roy, which resulted from a joint venture formed in 2008 between the designer, her then-husband Damon Dash, Jones and investment firm TSM Capital, which acquired its minority stake in 2007. Market intelligence in December had Rachel Roy the designer trying to find a partner to buy back her brand, or at least bring it under different ownership, so that the business can grow more than it has while under Jones’ portfolio.

In addition to the Rachel Roy designer line, there’s the more-affordable Rachel Rachel Roy contemporary fashion brand that is an exclusive for Macy’s.

The status of the Brian Atwood business, which Bluestar is also said to be interested in, was unclear as of press time.

In a regulatory filing with the Securities and Exchange Commission last week, an amended proxy Form DEFA14A, Jones said it will transfer ownership of the Jones Apparel, Stuart Weitzman and Kurt Geiger lines to separate controlled entities of Sycamore. Nine West Co. and Jeanswear Co. businesses will be merged into one entity, Nine West Holdings Inc., to be owned by Sycamore.

The moves are in connection with the raising of debt to finance the transaction, with $470 million being raised for Nine West Holdings Inc. That suggests that Sycamore is retaining the Nine West and Jeanswear businesses. Although both operate in the moderate price points channel, they are also profitable.

In 2013, Nine West posted adjusted net revenues of $1.39 billion, while the Jeanswear business had revenues of $829 million. Nine West offers dress footwear in the moderate price point category, while Jeanswear includes the Gloria Vanderbilt and Nine West brands.

The moves in how the businesses are held also suggests that Sycamore could contemplate selling parts of Jones Apparel, as well as the Stuart Weitzman and Kurt Geiger operations down the road.

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