Specialty retailer Rue21 revealed plans on Friday for an initial public offering within the next two months.
The company filed a registration statement with the Securities and Exchange Commission and firms typically go public within 60 days of the filing the statement, called Form S-1. The underwriters are Bank of America, Merrill Lynch, Goldman Sachs & Co., J.P. Morgan Chase & Co. and Piper Jaffray & Co.
Rue21 targets young men and women ages of 11 to 17 with private and exclusive brands. The retailer has more than 500 stores in 43 states, mostly in strip centers, regional malls and outlet centers, as well as a Web site. The store locations are in small- and middle-market communities with populations between 25,000 and 200,000 people. Typically, Rue21 faces limited direct competition in the communities in which it operates, the company said. Merchandise is offered in apparel, accessories, footwear and fragrances at value prices.
According to the regulatory filing, for the 26 weeks ended Aug. 1, net income spiked 61.4 percent, to $8.3 million, from a year ago on a sales hike of 33.3 percent, to $233.1 million. Comparable-store sales rose 4.1 percent in the period.
For the year ended Jan. 31, net income rose 38.4 percent, to $12.6 million, or 55 cents a diluted share, from $9.1 million, or 40 cents, in the same year-ago period. Sales gained 31.8 percent to $391.4 million from $296.9 million. Comps in the recent year were up 3.7 percent on top of a 7.8 percent gain in the prior year.
The company said in the filing it uses a fast-fashion business model that incorporates domestic importers and suppliers, as well as a sourcing network to provide faster turnarounds.
Pennsylvania Fashions Inc., Rue21’s parent, filed for bankruptcy protection in February 2002, and the company emerged in May 2003 under the name Rue21. Its majority shareholder at the time was buyout firm Saunders Karp & Megrue, which, in February 2005, merged with private equity firm Apax Partners Worldwide.
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