Arcapita Bank Buys Majority of J. Jill

Bahrain-based Arcapital Bank acquired a majority interest in women’s clothing retailer J. Jill, buying the stake from private equity firm Golden Gate Capital. Financial terms of the deal were not released. Golden Gate acquired J. Jill in 2009 for roughly $75 million. San Francisco-based Golden Gate will retain a minority stake in the company.


Arcapita Bank B.S.C.(c), the international investment firm headquartered in Bahrain, announced today that it and its affiliates have completed the acquisition of a majority stake in J. Jill, a leading multi-channel specialty retailer of women’s apparel based in the US. J. Jill maintains a prominent and valuable brand footprint through 225 retail stores across the United States, and leverages its presence with an e-commerce and catalog-driven direct sales business. The business performed well during the recent economic downturn and achieved revenues of $390 million in fiscal 2010.

Arcapita acquired its interest in J. Jill from Golden Gate Capital, which retains a minority stake in the business. Golden Gate acquired J. Jill in 2009, and over the last two years it has empowered company management to re-energize the brand. Recently, Golden Gate began a process to identify an investor that would partner with it to continue growing the J. Jill brand, while monetizing part of its successful investment. Arcapita’s retail private equity experience, including Loehmann’s, Caribou Coffee, Church’s Chicken and Bijoux Terner, made it ideally suited for this role.

“Through a broad program of improvements, Paula Bennett and the J. Jill team have delivered steady growth in the current environment and created a firm base to capture faster growth as the economic environment improves further. We look forward to working closely with Paula in continuing to build the company’s existing retail and direct business and open new stores. We estimate that J. Jill can support a considerable increase in store count, and we will use our experience in driving store opening strategies to help the company grow its store base by 5% to 10% each year,” said Stockton Croft, head of Arcapita’s US private equity line of business.

Arcapita identified several factors which make J. Jill an appealing investment opportunity within the sector. Mr. Croft added “J. Jill’s customer demographic is growing faster than all other age groups, and performing well against other groups in terms of salary growth and disposable income. The company’s multi-channel presence and focus on quality fabrics and simple, comfortable styles generate deep customer loyalty and yields strong gross margins. Furthermore, the company benefits from a highly regarded management team.”

“Our work with Paula Bennett and the entire J. Jill team reignited a great brand during a difficult economic period” said Joshua Olshansky, a Managing Director of Golden Gate Capital. “The company is now well placed to successfully implement a long-term growth strategy and, with the commitment and experience of Arcapita, to build upon the successes achieved to date.”

Arcapita’s Chief Executive Officer, Atif A. Abdulmalik, stated “Although in recent months we have directed more attention to the emerging markets of the Middle East, Asia and China in the search for new investment opportunities, our deal teams are now beginning to report a much more fertile environment developing for new deals in the US. This is an example of a strongly capitalized, well-managed company with plenty of growth potential at an attractive multiple, and in a sector where we have an excellent track record. I believe it represents an outstanding investment opportunity for our investors.”

Arcapita recently reported the results of the first six months of its fiscal 2011, turning in an income of $34 million over the period.