Limited Brands Inc. (Columbus, Ohio) has announced a definitive agreement to sell its Lerner New York/New York & Company subsidiary to an investor group led by Richard Crystal, the business unit's current president and ceo.
Under the terms of the agreement, Limited Brands will receive $78.5 million cash at closing, a $75 million subordinated note and warrants for 15 percent of the common equity of the new company. The transaction, which is subject to financing and other customary conditions, is expected to close within several weeks.
“Today's announcement represents a continuation of our strategy to sharpen Limited Brands'focus and create shareholder value,” said Limited chairman and ceo Leslie.
“I am very excited about the opportunity that this new financial commitment has given us to build New York & Company into the leading brand for women's value priced fashion apparel,” said Crystal. “This is great news for our brand, our customers and our associates.”
Lerner's, a long-time New York-area specialty retailer, was acquired by Limited Brands in 1985 and renamed Lerner New York. (It has been in the process of another re-name, to New York & Company.) In 2001, Lerner's 522 stores achieved $940 million in sales.