NEW YORK — Attracted by a bargain price tag of $250 million, about five strategic and financial buyers have been busy checking out Casual Corner.

Financial sources close to the bids declined to reveal the names of interested parties. But one thing is certain: Casual Corner’s new owner won’t likely be a hedge fund.

This is because hedge fund firms prefer public companies where their role is limited to only providing financial backing, and not management of the operations.

Casual Corner’s “bargain price” of $250 million is derived from a calculation of the company’s sales per square foot. Sources said sales per square foot are around $200, but they should be between $350 and $500.

Casual Corner was put on the block earlier this month. Its financial adviser is Financo Inc., which declined comment for this story.

Retail Brand Alliance operates the Casual Corner Group. Claudio Del Vecchio serves as RBA’s chief executive officer. Last month, the Casual Corner Group shuttered its 84-unit August Max chain. Del Vecchio told WWD at the time that the firm will get a better return by shifting the time and money spent on August Max to another division. A source close to the company said RBA began receiving phone calls following the August Max store closings, and that the calls prompted the firm to “consider all opportunities.”

While Casual Corner, which targets the misses’ category, still has strong brand loyalty, profitability has been an issue.

Sources in the industry say that vendors make better suitors, because Casual Corner has the ability to grow as a vertical company. In addition, the retailer’s 1,000-plus stores are in good locations and have decent square footage, which offers potential buyers more options to make money, including selling the leases. Potential candidates are Liz Claiborne, Jones Apparel Group and Kellwood Co.

Financial players could easily give the apparel firms a run for their money. These players, investment bankers say, often have other “assets” in their portfolio that could provide them with synergies for any deal. One example, said a banker not involved in Casual Corner, is the ability to take some of the stores and convert them for other retail space.

This story first appeared in the September 27, 2004 issue of WWD. Subscribe Today.

The attraction of Casual Corner is the ability to snap up 1,000-plus stores in a single transaction. For financial players, any downside would be protected by the valuable real estate aspect of a deal.