True Religion explores a sale as maximalist, Y2K-era styles make a comeback

The hedge fund that owns True Religion is exploring a sale of the Y2K-era jeans brand as it returns to growth and profitability after emerging from its second bankruptcy, CNBC has learned. 

True Religion sales jumped about 20% to around $280 million last year, and it brought in $80 million in earnings before interest, taxes, depreciation and amortization, people familiar with the matter said. 

It's unclear what valuation True Religion is seeking, but it could sell for a mid-single-digit multiple of its EBITDA, said the people, who spoke on the condition of anonymity because the discussions are private.

The sale process began in January and the sellers have targeted a wide range of consumer-focused private equity firms and a number of large, publicly traded apparel companies as potential buyers, the people said. 

Farmstead Capital Management, True Religion's owner, has hired Baird to run the sale process. 

Baird and True Religion declined to comment on the sale.

True Religion, best known for disrupting the jeans industry in the early 2000s with its signature stitching, embroideries, and smiling Buddha and horseshoe logos, has been on a roller-coaster journey over the last decade or so. 

When it emerged on the Los Angeles fashion scene in 2002, consumers were embracing maximalist styles from brands like Von Dutch and Juicy Couture. True Religion's flashy jeans became a staple item among A-listers like Jessica Simpson and Britney Spears. 

At the time, the jeans retailed for about $200 to $300 a pair, and True Religion found its niche catering to female consumers who made about $200,000 annually and tended to shop at high-end department stores like Neiman Marcus, Bloomingdales and Saks Fifth Avenue, CEO Michael Buckley said.

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