J. Crew considers IPO for Madewell; names interim CEO

J. Crew Group is considering an initial public offering for its fastest growing and most successful brand.

The retailer said that it is actively exploring strategic alternatives to maximize the value of the company, including a potential IPO of its Madewell business, as it looks to reduce debt and strengthen its balance sheet. The move could be completed as early as the second half of 2019. Madewell has been the one bright at J. Crew in recent quarters. Its sales rose 26% in the company’s last quarter versus a 4% decline at the namesake brand.

Separately, Michael J. Nicholson, president and COO, was named interim CEO of J.Crew Group, effective immediately. His appointment replaces the “Office of the CEO,” which was made up of Nicholson and three other J. Crew executives and has led the company since November 2018 following the sudden departure of CEO James Brett. Of the three executives, Libby Wadle will continue as president and CEO of Madewell, Lynda Markoe will continue as chief administrative officer, and Adam Brotman, president and chief experience officer, has resigned “for personal reasons,” and will leave the company effective April 19, 2019.

J. Crew said the potential IPO is a part of its initiative to “maximize value, position both the J.Crew and Madewell brands for long-term growth, and deleverage and strengthen the company’s balance sheet.”

“We believe a potential IPO of Madewell, which had another record year of performance in 2018, could unlock significant value and generate meaningful proceeds that would strengthen our balance sheet and increase our overall financial flexibility to address our 2021 debt maturities, giving us an improved platform to support J.Crew's turnaround and allowing Madewell to achieve its full potential over the long-term,” stated Nicholson.

Nicholson joined J.Crew in 2016 as president, COO and CFO. Previously, he was with Ann Inc., which he joined in 2007 and where he served as executive VP, COO, CFO and treasure from December 2012 until August 2015. Prior to that, held leadership positions at Limited Brands and Victoria's Secret Beauty Company.