With a name like rue21, the company must be cool, right? Well, it is. rue21 is a specialty apparel operator that is focused on the fickle young crowd -- that is, those between 11 and 17 who want to look "21." Or, for older people who want to feel "21."
Capitalizing on things, rue21 has filed to go public. And it should be a hot offering.
rue21 has more than 500 stores across 43 states and is constantly updating its merchandise mix (such as with footwear, fragrances, and so on). It helps that the company has built a flexible business model, which uses a sourcing platform that is cost-effective and fast.
rue21 also focuses on small and middle market locations. In these underserved communities, people love getting the company's trendy fashions for good value.
And rue21 makes effective use of its website, especially the rueCommunity. No doubt, this is a necessity for being successful with the company's demographic.
All in all, the rue21 formula has worked quite well. Despite the tough economic environment, the company posted a 4.1% increase in comparable sales for the past 26 weeks. During this time, net sales came to $233.1 million, up 33.3%. Net income was $8.3 million.
And, rue21 believes the growth will continue. In fact, the goal is to reach more than 1,000 stores within five years.
The lead underwriters on the IPO include BofA Merrill Lynch (NYSE: BAC), Goldman Sachs (NYSE: GS), and JPMorgan (NYSE: JPM).
Tom Taulli is the author of various books, including The Complete M&A Handbook
Entrepreneur's Journal: Want to get a piece of the Buffett/Goldman honeypot?
The week in preview: No turkey earnings from Tyson, Hormel, Cracker Barrel ...
Comfort Zone Investing: Intel is saying something ... can you hear it?
Add your comments