Banking & Finance

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

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.