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Star Avenue sells J Brand to Fast Retailing

by Laura Board  |  Published November 30, 2012 at 11:57 AM
Uniqlo owner Fast Retailing Co. Ltd. said Friday, Nov. 30, it had agreed to buy 80.1% of Los Angeles denim manufacturer and retailer J Brand Holdings LLC from Star Avenue Capital LLC, and J Brand management for about $290 million.

Seven-year-old J Brand was founded by CEO Jeff Rudes and has been a Star Avenue portfolio company since February 2010. Morgan Stanley began conducting a review of the business for its owners in around July, a source told The Deal at the time.

Yamaguchi City-based Fast Retailing,said J Brand had sales of $124.4 million and net profit of $17.8 million in 2011. As well as its core denim business, J Brand has expanded into leather and women's ready-to-wear.

Fast Retailing had sales of ¥928 billion ($11.2 billion) in the fiscal year ended August. Outside Japan it has stores in the U.S., the U.K., China, Hong Kong, South Korea, France, Singapore, Russia, Taiwan and Malaysia.

The Japanese company expects to spend $10 million on advisory fees connected to the acquisition, which it will fund through internal resources and possibly new bank loans.

Star Avenue currently owns 52% of J Brand, and Rudes holds 36%.

Management including Rudes will remain in place following closing, which is expected by year-end.

Star Avenue, which has offices in New York and Los Angeles, is a growth equity investor with a target investment size of $15 million to $25 million of equity. In September it invested an undisclosed sume in hair care brand Macadamia Natural Oil, of Chatsworth, Calif.

After the sale of J Brand, its only other portfolio company will be Maximum Human Performance, a sports nutrition company.

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Tags: Fast Retailing Co. Ltd. | J Brand Holdings LLC | Jeff Rudes | Macadamia Natural Oil | Maximum Human Performance | Morgan Stanley | Star Avenue Capital LLC | Uniqlo

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