Some things are unpredictable and the ability to integrate two large organizations is pressed tightly against the complexity ceiling of management skills, dooming very deal like this to the world of probability and a fixed failure rate.

The failures are always similar, usually the inability to derive the oft mention and infamous “synergy” between the organizations. From my view as a long time COO or Operations Manager it stems from the lack of a well understood business plan, although these aren’t popular among the business school crowd at the moment.

Acquiring J Jill: “proven expertise in managing a complex multi-channel operation”
Translation: “Yeah, we got this.”

Selling J Jill: “[selling J Jill] enables us to focus our time, resources and attention
exclusively on rejuvenating our core Talbots brand and return to profitable
growth.”
Translation: “J Jill….ewww”

@ winstongator: Synergies = Teddy K. He liked that kid who did something with cellphones.

Whenever I hear synergy I think of Teddy K.

You want fiduciary concern, or (gasp!) responsibility? Don’t look to an M&A broker. For that matter, ANY broker: their job is to maximize THEIR firm’s profits without doing anything blatantly deceptive that might queer other deals downstream.

What about the role of the Board of Directors, who take not fat, but nice fees to advance the interest of the shareholders? Aren’t they the ones who got the firm in over its head?

Good post.

Todd Slater of Lazard Capital Markets wrote in a report that J. Jill posted an operating loss of $76 million in 2008. Since that is in excess of the purchase price, that would make J. Jill a total loss for Talbot’s. Half of a billion dollars down the drain.