The buzz in the apparel retail world is that either Urban Outfitters Inc. (NASDAQ:URBN) or Sears Holdings Corp. (NASDAQ:SHLD) could crash J.Crew Group Inc.'s (NYSE:JCG) family reunion with TPG Capital and Leonard Green & Partners LP.

However, Urban Outfitters is more likely than Sears to top the private equity firms' $43.50 a share, $2.86 billion, bid before a go-shop period expires on Jan. 15.

Both technically have the financial wherewithal, but the former is a better fit. Urban Outfitters -- with a market capitalization of about $5.9 billion -- might be biting off a bit more than it can chew with a bid in the range of $3 billion. Yet a deal with the Philadelphia-based retailer could pique the interest of J.Crew chairman and chief executive Millard "Mickey" Drexler, according to a retail apparel banker.

With a pile of cash on its balance sheet -- just more than $500 million -- and a strong management team in place, Urban Outfitters could be an attractive alternative for Drexler. There are also potential synergies between the two companies that would allow them to cut costs in several areas. Urban Outfitters is on the hunt for concepts to plug into its maturing portfolio.

TPG, it should be noted, previously acquired an 88% stake in J.Crew in 1997, bringing Drexler on board in 2003, which sparked a revival of the chain. TPG took it public in 2006, raising $376 million from the initial offering, and only recently sold its remaining shares.

Sears, meanwhile, is thought to badly need another business with growth opportunities to freshen itself up. But the struggling company, in the eyes of Drexler, could drag the J.Crew brand down, according to the banker.

To compensate, Sears would likely have to pay a much higher premium for J.Crew, which the banker said is unlikely. In addition, adding J.Crew alone is not likely to solve Sears' problems. The Hoffman Estates, Ill.-based company has tried this tactic in the past to no avail when it acquired Lands' End Inc. in 2002 for $1.9 billion in cash to "gussy up its image." Today, Lands' End is seen as having gotten lost in a hodge-podge of brands and real estate holdings under the Sears' umbrella, with only the Sears Canada division as a bright spot.

Marry a good asset to a bad asset and what do you have in the end? A promising future divestiture, the thinking goes. Jones Apparel Group Inc., if you remember, ended up selling Barneys New York Inc. to Istithmar World PJSC for nearly $1 billion in 2007, after acquiring it for $400 million just three years earlier. The deal was said to have prevented a sale of all of Jones Apparel to a private equity firm, but was criticized from some corners because Barneys was the most valuable asset Jones Apparel owned.

At the very most, J.Crew could be an asset Sears flips down the road if it manages it well, a tactic Sears has no track record for.

If nothing else, Urban Outfitters, by looking at J.Crew's books, is indicating that it could be looking to grow its business through a large acquisition. The retailer has said it has reached the maximum number of store locations domestically without overly saturating the market, a problem that has plagued peers such as Gap Inc. (NYSE:GPS), Starbucks Corp. (NASDAQ:SBUX) and American Apparel Inc. (AMEX:APP).

Urban Outfitters has been eyeing acquisitions with price tags under $100 million, looking for three or four concepts it could take national and turn into companies with $500 million in revenue, while not cannibalizing its own business.

Even though J.Crew does not fit these criteria, Urban Outfitters could be seeking a strong play that will take it international by bidding on the preppy retailer. Urban Outfitters does not have the international draw that J.Crew does. Going global isn't just another fashion fad, it's the future in more than just outsourcing.