Spin-off season could be coming to Wall Street, since tech IPOs are recently out of fashion, and companies like Madewell and Old Navy are poised to make a splash with investors eager to put capital to work.
Madewell could be headed for a market debut of its own, without its parent company, and the clothing retailer's Facebook ($FB) Were Here Count reflects that it continues to get consumers through its doors.
Madewell is J. Crew's ($PRIVATE:JCREW) younger brand, that's growing its footprint and gathering more social and online consumer attention - which led to a Moody's expert to call it the "crown jewel" of the entire company. And, for the LBO team that bought out J. Crew, being able to generate a substantial return on what might otherwise be a loser amid a retail apocalypse of stand-alone mall-based brands would represent a far better outcome than the LBO shops that put money into competing and failing outfits.
As Madewell grows its footprint, J. Crew's is shrinking. Our time-lapsed map can be pinched and zoomed to any region, to highlight how Madewell has expanded in recent years, and how J. Crew has reduced its retail footprint. Private equity powerhouses TPG Capital and Leonard Green spent $3 billion taking J. Crew private in 2011, but that deal has long struggled under the toxic combination of an enormous debt load and the nationwide retail apocalypse plaguing companies from Abercrombie to Pier One.
Madewell's Twitter ($TWTR) Follower Count dipped briefly in 2018, thanks to a purge by social media network administrators removing accounts that violated its terms of service - and it only dinged Madewell's following, which has mostly recovered in the time since. J. Crew, however, saw its follower count (not pictured ) drop more than 5% and it hasn't recovered.
At a time when other retailers are facing secular pains as DTC consumer trends catch hold with younger shoppers, private equity deals to buy out once-popular brands are struggling. But J. Crew's owners - and Madewell - has an opportunity to buck the trend, in part thanks to Madwell's ability to attract consumers' attention in an increasingly crowded, and loud, online marketplace. The last challenge will be determining whether or not tech IPOs turned off institutional investors, or if Madewell can eek out an offering soon.
About the Data:
Thinknum tracks companies using information they post online - jobs, social and web traffic, product sales and app ratings - and creates data sets that measure factors like hiring, revenue and foot traffic. Data sets may not be fully comprehensive (they only account for what is available on the web), but they can be used to gauge performance factors like staffing and sales.