As Leonard Green Takes All of Retail Private (BJ, JAS, JCG, COST)

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The rumors and thought of private equity in retail is going on and on, oddly enough with the same player.  BJ’s Wholesale Club Inc. (NYSE: BJ) is the newest target according to many web reports, and the buyer is said to be none other than Leonard Green & Partners, L.P.  If you need a reminder of who Leonard Green is, this is the outfit that is already buying the crafts and fabrics retail outfit of Jo-Ann Stores Inc. (NYSE: JAS) and also in a management-led buyout partnering to buy J. Crew Group Inc. (NYSE: JCG).

Leonard Green already had a 9.5% stake in BJ’s back in the summer.  There was already an expression of interest back then, and this new report seems to be that a BJ’s sale process is coming after the holidays and that Leonard Green remains an interested party.

Leonard Green & Partners, L.P. is well known private equity firm and its website shows current assets under management of approximately $9 billion in equity capital.  The firm was founded back in 1989 and it claims that it has invested in 53 companies with aggregate value of $44.4 billion.

As far as how BJ’s compares in size against Costco Wholesale Corporation (NASDAQ: COST), Costco has a market cap of $31.5 billion.  For annual sales estimates from Thomson Reuters: Costco is expected to post annual sales of $85.02 billion for the fiscal-year about to end and expected to post $92.01 billion for next year, which is way above the BJ’s estimates of $11.04 billion for this year and $11.86 billion next year.

BJ’s Wholesale Club Inc. shares are indicated up 6% at $47.20 in the pre-market.  Its 52-week range is $32.36 to $48.43 and its market cap based on a $44.47 close was listed as $2.43 billion.

JON C. OGG