Former Golden Gate pair nears debut fund close

Sycamore Partners, formed by two former Golden Gate Capital executives earlier this year, has made a bid for clothing retailer Talbots as it nears a final close for its maiden fund.

Sycamore Partners, a firm formed by two executives who left Golden Gate Capital in January, is understood to be approaching a final close on its debut fund, which has been targeting between $750 million and $1 billion.

The firm, which was formed earlier this year, has also made a bid to take over women’s retail chain Talbots for $3 per outstanding share, a 92 percent premium on the company’s 6 December closing price, according to documents filed with the US Securities and Exchange Commission.

Sycamore, which focuses on consumer and retail investments, was launched earlier this year by former Golden Gate Capital managing director Stefan Kaluzny. Former Golden Gate principal Peter Morrow also left to join Sycamore as a managing director.

Talbots’ shares leapt to $2.48 as of press time in the wake of the filing, which reports have indicated would value the company at around $212 million.

The firm had already acquired a 9.9 percent stake in Talbots earlier this year, according to a letter Kaluzny filed with the SEC. The letter expressed disappointment in Talbots’ performance over the last year, when the company recorded second and third quarter losses of $37.4 million and $22.1 million, respectively.

In addition to its recent performance, Kaluzny also cited the resignation of president and chief executive officer Trudy Sullivan and the failure to replace its chief creative officer as evidence of the company’s need for new owners.

“Given the Company’s rapidly deteriorating situation during the critical holiday shopping season, we believe expeditious action is needed to protect shareholders’ investment in Talbots,” Kaluzny said in the letter. “We believe this represents a compelling opportunity for shareholders to protect their investment in Talbots and that Talbots’ shareholders would welcome the certainty of a significant all-cash premium for their shares.”

Earlier this year, Sycamore acquired a 51 percent interest in Mast Global Fashions, the third-party apparel sourcing division of Limited Brands. Terms of the transaction were not disclosed.

Kaluzny targeted similar investments while at Golden Gate, including the 2007 $173.6 million take-private of the Blair Corporation, an apparel and home products direct marketer.