Liz Claiborne responded with its own announcement Monday, with CEO Paul Charron saying, "We are pleased that J. Jill has decided to review strategic alternatives, and we look forward to participating in the process." Claiborne's offer, which it made on Nov. 12 and which would have amounted to about $366 million, would pay J. Jill shareholders "a premium of over 40%" for their shares, according to the Claiborne statement Monday.
J. Jill's announcement Monday said there is no certainty that the exploration of strategic alternatives will result in a transaction, and it said it wouldn't disclose developments until its board of directors has made a decision. The Liz Claiborne offer came after J. Jill reported third-quarter financial results that included a net loss of $2.7 million.
In announcing the third-quarter results, Gordon Cooke, president and CEO of J. Jill, commented that, "Our overall business continues to be disappointing." Although its third-quarter comparable store sales rose 4.7%, its year-to-date comparable store sales are flat compared with last year's sales.
Liz Claiborne initiated discussions with Cooke more than two years ago and in March of this year submitted a written offer to buy J. Jill for $17 per share, according to information on the company's web site. The site lists a number of reasons that Claiborne officials believe the deal that Claiborne offered in November.
Among other reasons, Claiborne calls itself "the perfect partner for J. Jill," saying that J. Jill is a well-regarded but underperforming brand. "J. Jill would benefit from enhanced product development-something that has long been our core expertise," the Claiborne argument states.
In Monday's announcement, Charron cited "our proven track record of growing brands," along with its understanding of the `young boomer' market and "the opportunity for significant synergies" if his company were to acquire J. Jill. J. Jill's target audience is affluent women age 35 and older, while Claiborne offers an extensive range of women's and men's clothing under a variety of brands.
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