Plus-sized retailer FullBeauty seeks sale or IPO, say sources-Reuters

(Reuters) – FullBeauty Brands Inc is exploring a sale or an initial public offering that could value the privately held plus-sized women’s and men’s fashion retailer at more than $1.5 billion, including debt, according to people familiar with the matter.

A potential sale comes as investors are looking to capitalize on the roughly $17.5 billion market for plus-size fashion in the United States that remains largely underserved by mainstream retailers, according to market research firm the NPD Group.

FullBeauty sells clothing for sizes 12 and up through catalogs and the Internet. Its brands include Women Within, Jessica London and KingSize.

The New York-based company, owned since February 2013 by private equity firms Charlesbank Capital Partners and Webster Capital, is working with investment bank JPMorgan Chase & Co on the potential sale, the people said this week.

An auction for the company is already underway and has attracted interest from several private equity firms, the people added.

FullBeauty has also appointed investment banks, including JPMorgan and Jefferies LLC, to lead an initial public offering as an alternative path should the auction fail to meet the company owners’ valuation expectations, the people said. Bloomberg News reported in March that FullBeauty was working with banks on an IPO.

FullBeauty currently has annual earnings before interest, tax, depreciation and amortization of around $150 million, the people said.

The sources asked not to be identified because the matter is not public. Representatives for Full Beauty, Charlesbank and Webster Capital could not be reached for comment. Representatives for JPMorgan and Jefferies declined to comment.

Charlesbank and Webster Capital acquired FullBeauty, previously known as OneStopPlus, for $522 million in 2013 from Paris-based luxury group Kering SA, the owner of luxury fashion brand Gucci.

Through dividend recapitalizations – the practice of having a company borrow in order to pay dividends – Charlesbank and Webster Capital have already received about $500 million from FullBeauty since they acquired it, more than 3.5 times their equity investment, according to Moody’s Investors Service Inc.