Brentwood Receives FTC Approval to Buy J.McLaughlin

November 6, 2015

Lillian Rizzo, Dow Jones

Brentwood Associates has agreed to acquire Sea Island Clothiers Holding Inc., a preppy clothing retailer better known as J.McLaughlin, according to a person familiar with the situation.

The deal also received antitrust regulatory approval, according to a filing with the Federal Trade Commission. It’s expected to close before the end of this month, the person added.

The Brooklyn-based retailer had been put up for sale recently, and attracted a lot of interested buyers, according to other people with knowledge of the deal.

The investment would be made from Brentwood Associates Private Equity V LP, according to the FTC filing. The consumer-focused firm closed its fifth fund last December with $688 million in commitments, 55% larger than its 2008 vintage fund.

The Los Angeles firm typically makes equity investments of $25 million to $200 million, according to its website.

The Federal Trade Commission issues early antitrust notices when the agency and U.S. Justice Department don’t think a proposed transaction would violate U.S. antitrust laws. However, this doesn’t necessarily mean a deal has been or will be completed.

J.McLaughlin was founded in 1977 by brothers Jay and Kevin McLaughlin in Brooklyn, where its flagship store and factory is still located.

In 2011 J.McLaughlin sold a majority stake to JH Partners, Highland Consumer Fund, and Palladin Consumer Retail Partners for an undisclosed amount. Venture firm Suffolk Equity is also a backer.

At that time, Jay and Kevin McLaughlin, and chief executive Steven Siegler retained a minority stake in the company, according to a report at the time in Women’s Wear Daily.

The recent auction for J.McLaughlin was for a majority stake in the company, and most of its current backers were expected to sell their positions in the retailer, said one of the people.