A recent Bloomberg report that Sears Holding and Urban Outfitters are considering possible bids for J Crew is being greeted with open skepticism on the Street.
It's not that have already agreed to be acquired by TPG Capital and Leonard Green; they can solicit other bids until January 15.
Our own David Faber said a deal was "unlikely."
Brian Sozzi, a retail analyst at Wall Street Strategies, went further, saying that "Sears runs the risk of losing Mickey Drexler and his team if it tries to scoop up the accessible luxury retailer (I just can't imagine J Crew shop in shops inside a Sears anchor location)."
This makes sense to me. One retail stock trader said Drexler has a low opinion of Sears: "Lambert could not pay him enough to run Sears in total."
Sozzi also doubted that URBN would make a bid, noting, among other things, that it would blur the consumer spending line: "a person buying a sweater at J Crew may steal a sale from Urban Outfitters or Anthropologie (whose assortment mirrors J Crew's)."
Jeffries also threw cold water on the URBN idea, saying, "We would view URBN's interest in JCG to be a big negative for the company, as it would bring possible distractions to the core strategy."
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