PE Movers & Shakers

Introduction Jesse Rogers, Altamont Capital Stefan Kaluzny, Sycamore Partners Mitchell Blutt, Consonance Capital Thomas Edelman and Ben Guill, White Deer Energy Frank Baker, Peter Berger and Jeffrey Hendren, Siris Capital Chris Iorillo, Steve Rossi and Eric Willis, CounterPoint Capital

It didn't take long for private equity and retail veteran Stefan Kaluzny to grab headlines after decamping from Golden Gate Capital early this year. Kaluzny, together with colleague Peter Morrow, co-founded Sycamore Partners and was soon targeting Talbots Inc., with plans to engage the struggling retailer in strategy talks. In early August, Kaluzny unveiled a 9.9% stake in a surprise move that forced Talbots to adopt a poison pill a day later.

That splashy opening gambit was a departure from Kaluzny's investing style during a decade-long career at San Francisco private equity firm Golden Gate. The turnaround specialist, along with Morrow, typically engineered buyouts or carve-outs of retail businesses. His better-known forays include Express Inc., J. Jill Group Inc. and Eddie Bauer LLC, the last one being a work in progress. There were others, too: Herbalife Ltd., On The Border Mexican Grill & Cantina, Romano's Macaroni Grill and Apogee Retail.

Hingham, Mass.-based Talbots, with its dwindling cash and $84 million of outstanding debt, may just be the ideal opportunity for Kaluzny to play a transformative role, says an industry banker. Nine-month-old Sycamore is said to have raised about $300 million in a first-fund close. Kaluzny declined to be interviewed, citing regulatory constraints. A source says the New York firm is targeting between $750 million and $1 billion.

Kaluzny, 45, has a "driven entrepreneurial spirit," says another financial adviser who worked with him on several transactions. He looks for a particular pattern that involves a strong brand saddled with bad practices that can be fixed, adds the adviser.

At Express, which Golden Gate acquired from Limited Brands Inc. for about $750 million, Kaluzny brought back Michael Weiss, a 30-year Express veteran, as CEO. Weiss then presided over a threefold jump in Ebitda, enabling a successful initial public offering last year.

Another success story, according to the adviser, was J. Jill, acquired from Talbots in July 2009 for about $75 million. When Golden Gate sold it to Arcapita Bank BSC in March, the firm retained a minority interest.

Though reasons for Kaluzny's departure in January from Golden Gate aren't clear, the timing looked awkward. In the same month, apparel and home products marketing giant Orchard Brands, one of Kaluzny's portfolio assets, had just announced a prepackaged bankruptcy filing amid declining sales in a tough consumer economy and an overleveraged balance sheet.

Still, Kaluzny has a laser focus on the retail sector and boasts extensive industry contacts that set him apart, says Stefan Selig, executive vice chairman at Bank of America Merrill Lynch, who first met him when Golden Gate bought Express from Selig's longtime client, Limited Brands.

In short, adds Selig, he's "not just a financial engineer."