J. Crew considers IPO for its successful sister Madewell

By ANNE D'INNOCENZIOFeaturesAssociated Press

Clothing retailer J. Crew Group Inc. says it's considering a potential initial public offering for its successful Madewell brand.

The announcement Thursday comes after the struggling company completed a review of the options for its business.

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It says a Madewell IPO, if pursued, could be completed as early as the second half of this year.

Separately, it named Michael Nicholson, president and chief operating officer, interim CEO of J. Crew Group Inc. Retail veteran Mickey Drexler led J. Crew for more than a decade, helping it become a coveted fashion brand before it hit a multi-year sales slump. He severed his last ties with the company in January.

The news comes as some fashion companies are trying to capitalize on a burgeoning IPO market. Denim giant Levi Strauss & Co. returned to the public market in March as it stages a comeback even as it faces increasing competition and a changing retail landscape.

Some fashion companies are also looking to split up their businesses. Gap Inc. said in late February that it plans to split into two independent publicly traded companies — low-priced juggernaut Old Navy and a yet-to-be named company, which will consist of the iconic Gap brand, Banana Republic and the lesser known Athleta, Intermix and Hill City. Last year, VF Corp. said it will be splitting its denim business anchored by Lee and Wrangler jeans into an independently traded company.

J. Crew recently began to add a wider variety of styles as a way to turn around its business. Meanwhile, Madewell has done well with its classic, quality clothing. In its latest fiscal year ended Feb. 2, J. Crew sales fell 4% while Madewell's sales soared 26%.