Talks End between J. Crew and Fast Retailing

The Wall Street Journal reports that merger discussions have broken down between J. Crew Group Inc. (New York) and Fast Retailing Co. Ltd. (Yamaguchi, Japan).

While it seems to reduce the prospects for a deal, Journal sources said the end of discussions could prove temporary, and both companies could renew them down the road.

It isn't clear exactly why the talks broke down, but some of the people involved said the fact that they became public played a role.

The breakdown in negotiations raises the likelihood that Crew's owners, private-equity firms TPG Capital (Fort Worth, Texas) and Leonard Green & Partners LP (Los Angeles), will pursue an IPO for Crew, especially with the stock market trading at near-historic highs.

The were seeking a reported $5 billion from Fast Retailing, which has made clear its ambitions to be the largest clothing retailer in the U.S. and, eventually, the world. Its Uniqlo chain, which has more than 1200 stores in Asia, has only a handful in the U.S. Fast Retailing has said its plan is to have hundreds of U.S. stores.