BJ's, Leonard Green in Talks (Thursday's News & Notes)

The streak of private equity firms going after retailers continues, with Leonard Green & Partners signing a confidentiality agreement with BJ's Wholesale Club, according to Supermarket News.

Private equity took a breather from the retail sector in 2009 and 2010, but there has been a definite pick-up in deal activity in recent months, including the contested buyout of J.Crew by a Leonard Green/Texas Pacific partnership and several restaurant chain buyouts.

As a buyout target, BJ's has several things that might make it attractive to private equity players, including a focus on value and an established brand name. Its main weakness, according to analysts, is that it's competing against two stronger players: Costco and Sam's Club. That would give an experienced private equity owner something to work with in creating additional value for the chain. If the Leonard Green deal goes through, it would be interesting to see what the firm will do with BJ's to help it gain market share.

Ironically, while private equity firms are taking a closer look at more and more retailers, a chain that perhaps needs a private partner the most, Barnes & Noble, is about to give up on its search for a buyer, Bloomberg reports.

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