J. Crew Said in Merger Talks With Owner of Uniqlo

The owners of J. Crew, the fashion purveyor of choice for the likes of Michelle Obama, are in early discussions to sell the company to Fast Retailing, the Japanese retailer whose holdings include Uniqlo and Theory, a person briefed on the matter said on Friday.

Talks between Fast Retailing and J. Crew’s owners, the private equity firms TPG Capital and Leonard Green & Partners, are in early stages and could still fall apart, this person cautioned. TPG and Leonard Green are likely to seek a deal that values their company at more than $4.5 billion.

The private equity firms could also choose to take J. Crew public once more, this person added. They have begun considering hiring banks to run an initial public offering, effectively exploring both a sale and an I.P.O. in a so-called “dual-track process.”

If a deal is struck, it would mark the latest change in ownership of J. Crew, which has transformed itself over the past decade from preppy staple into a seller of more sophisticated but still accessible fashion. Its top designers, particularly creative designer Jenna Lyons, have become celebrities in their own right.

Much of the company’s success has been attributed to its garrulous chief executive, Millard S. Drexler, who joined shortly after his ouster from the Gap and built a retail powerhouse. Mr. Drexler teamed up with TPG and Leonard Green to take the company private nearly three years ago, in a process that some shareholders criticized as flawed.

A deal would also be the latest effort by Fast Retailing to become one of the most dominant clothiers in the world. The company, run by Tadashi Yanai, has become best known for Uniqlo, a brand praised as much for its simple style as its low prices. But it also owns a plethora of other brands, from the French label Comptoir des Cottoniers to the high-fashion Helmut Lang.

Still, Mr. Yanai has admired and coveted J. Crew for years â€" he has made a number of approaches over the years â€" and could see the company as a crown jewel in his empire.

The American retailer disclosed last week that its sales rose 9 percent to $2.4 billion in its most recent fiscal year, which ended on Feb. 1. Direct net sales rose 16 percent, to $756 million, though comparable company sales rose only 3 percent during the period, compared to 13 percent 12 months ago.

News of the talks was first reported by The Wall Street Journal.