BCBG Max Azria has put itself on the block, The Post has learned.
The Los Angeles-based fashion empire — whose slinky dresses have hugged stars like Beyoncé and Victoria Beckham — is “looking for a partner” as it digs out from hundreds of millions of dollars in debt, according to sources close to the company.
UBS has been retained to assist on the process, which is being led by BCBG creditor Guggenheim Corporate Funding, sources said.
With no obvious strategic partner for the brand, private-equity shops are the most likely bidders, sources said.
“BCBG continues to realize strong performance and is very comfortable with its current capital structure,” a spokesman said. “We have a policy of not commenting on rumors or strategic initiatives.”
Nevertheless, some sources say Max Azria — the chain-smoking designer who launched the fashion house in the late 1980s — may lose control of the label, which could fetch more than $1 billion.
That’s partly because of the size of BCBG’s junk-rated debt load, which has swelled following an ill-fated acquisition of a group of mall-based teen stores in 2006. Sources said investors are likely to seek a controlling stake in order to prevent Azria going on another shopping spree.
“You’d have to put [Azria] in a cage to do a deal with him,” said one investment banker, asked for what advice he’d give a prospective buyer. “He’s a non-stop deal guy. He makes some good deals, but he’s made plenty of bad ones, too.”
Indeed, Azria has both dazzled and perplexed industry insiders with his insatiable appetite for transactions. A deal with pop star Miley Cyrus to put a line of low-priced togs in Wal-Mart appears to be a success. But Azria has stumbled in partnerships with big retailers.
The most notable transaction that Azria has failed to complete was an initial public offering, which the company had announced plans for in 2006 before the economy tanked.
The recession has likewise pounded the company’s Max Rave division, with retail stores under names like Rave, Lola and G+G.
But despite the recent, rocky retail climate, sources say the BCBG brand continues to enjoy strong demand at upscale outlets like Saks, Neiman Marcus and Bloomingdale’s, as well as the company’s specialty stores.
That has helped push cash flow to $150 million, according to one person briefed on the company’s finances.