AP Photo/Bullit Marquez
Uniqlo parent company Fast Retailing is reportedly in talks to purchase preppy American retailer J. Crew for $5 billion.
While many have questioned whether J. Crew is worth that much, Barbara Thau at Forbes points out that there's a good reason the Japanese retailer is willing to pay a premium.
Uniqlo executives have voiced intentions to rapidly expand in the U.S. But the company faces many challenges, such as finding the right fits and garments for American consumers.
A buyout of J. Crew would potentially include CEO and chairman Mickey Drexler—long considered to be the guru of American retail. Drexler is renowned for his ability to identify products that sell out.
Should Drexler lend his insights, "Uniqlo would get to acquire much more North America merchandising savvy," Thau writes.
While Uniqlo currently only has 17 U.S. stores, it plans to open 200 by 2020.
Thau also points out that privately-owned J. Crew could benefit from a partnership with Uniqlo.
The company's deep pockets would give J. Crew the power to expand into Asia and other international locations.
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