True Religion seeks buyer or minority investor, Reuters reports

US denim and lifestyle brand True Religion is exploring strategic options, including a full sale or the sale of a minority stake, according to a Reuters report. The potential transaction could value the company at close to 1 billion dollars, people familiar with the matter told Reuters.

The El Segundo, California-based company is working with financial services firm JPMorgan on the process, which remains at an early stage, the sources said.

Majority owner Acon Investments considers stake sale

True Religion is owned by US private equity firm Acon Investments, which acquired a controlling stake in the business alongside its affiliate, SB360 Capital Partners. Jay Schottenstein, chairman of SB360 Capital Partners, also serves as chief executive officer of US clothing retailer American Eagle Outfitters.

Since Acon Investments completed its acquisition, True Religion’s earnings before interest, taxes, depreciation and amortisation (EBITDA) have nearly doubled, approaching 150 million dollars annually. Revenue is close to 550 million dollars a year.

True Religion, Acon Investments and JPMorgan declined to comment on the matter.

Brand turnaround drives retail expansion

Founded in Los Angeles in 2002, True Religion rose to prominence as a premium denim brand known for its distinctive Super T stitching and celebrity following. However, shifting consumer preferences towards athleisure and lower-priced alternatives contributed to financial difficulties, leading the company to file for Chapter 11 bankruptcy protection in 2017 and again in 2020.

As part of its current strategy, the brand has expanded its product offering across categories, age groups and genders while lowering price points. Denim now accounts for 35 percent to 40 percent of total revenue, chief executive officer Michael Buckley said on a podcast.

The company currently operates around 60 brick-and-mortar stores and has long-term plans to expand its retail network to 150 locations.