True Religion Apparel (NASDAQ: TRLG) is one of those companies that has a core cult following of investors, and it nearly defies logic. The company sells $200 and $300 blue jeans, among other apparel, has its own stores and also sells through key retailers like Urban Outfitters (NASDAQ: URBN), Neiman Marcus, Barneys, and other upscale retailers.

Shares are up big today, at $22.53 as of 10:20, and this more than 10% post-earnings move could get the stock within striking distance of its all-time highs from 2006. The company posted $0.21 net and $0.25 non-GAAP EPS on revenues of $35.7 million. Analysts were looking for $0.26 non-GAAP EPS and $35.7 million in revenues, according to First Call.

The company plans to add to its eight branded stores, increasing to fifteen stores by year end. The company is maintaining strong guidance for 2007, with $1.24 to $1.27 EPS and maintained about $167 million in revenue projections. First Call has estimates of $1.25 EPS and $166 million in revenues. This has been a stock that many short sellers have attacked, because after all, it sells $300 jeans.

This one has been shocking when you consider what the company does. It has a $500 million market cap. It has seen management infighting over a divorce that resulted in large share sales. Many on Wall Street think it is a prime short sale candidate. It hasn't been able to find a buyer. And it sells $300 jeans. Yet here it is, up over 10% and close to a year-high again.

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.

It has been a tough start of the day for Jones Apparel Group (NYSE: JNY) after reporting an unexpected second quarter loss this morning. The stock fell sharply this morning, setting a new 52-week low.

Analysts had expected a profit of $0.31 per share, and were stunned by the loss of $0.44 per share. Excluding some special items, the company earned $0.17 per share, marking the second straight quarter that the company has failed to meet estimates.

The company blamed its poor performance on a tough retail market, which led to weak same stores sales. The troubles that the retail market created forced Jones to slash many of its prices just to get some of its excess inventory out the door.

Also making news this morning was the company's decision to sell its subsidiary Barneys New York Inc. The company has accepted a $900 million offer from Fast Retailing. Jones bought Barneys New York, a chain of upscale department stores, for $400 million.

Yesterday's unsolicited non-binding proposal for $900 million from Fast Retailing to purchase Barneys increases the likelihood that private equity will revisit Jones Apparel Group Inc (NYSE: JNY). In 2006, Jones explored the private equity route but found the offers unattractive.

However, receiving a huge sum for Barneys, the once-bankrupt retailer, might change that. Jones has a $3.1 billion market cap and is expected to generate $431 million in 2007 EBITDA and $447 million in 2008 EBITDA, with much of that being free cash flow.

Trading at 7.7x and 7.5x enterprise value-to-EBITDA according to a Goldman Sachs report released yesterday, this deal that can get financing if private equity offers a 10 to 20% premium.

Jones has good management and good cash flow and provides a very attractive trading opportunity for investors with the stock having dropped from $34 to $28 the past few months. The retailer should be able to receive in the low-to-mid $30s when adjustments are made for the Barneys sale.

Jones looks to me like a good risk-reward trade with not much downside and good upside appreciation.

It's possible that Istithmar, the private-equity arm of the Dubai government, is grimacing today, after news of a higher bid for Jones Apparel Group Inc's (NYSE: JNY) Barneys New York unit surfaced. Under the terms of their agreement, Jones is allowed to weigh other offers for the Barneys unit until July 22 and can explore bids for the entire company through August 11. Jones said Thursday it received an unsolicited bid from Japanese clothing company Fast Retailing Co Ltd to acquire Barneys for $900 million. That's a 9% premium over Istithmar's $825 million offer.

Fast Retailing, which owns stores in more than 12 countries, says owning Barneys New York would increase its market diversification and boost its revenue. The company recently expanded its Uniqlo casual clothing into the U.S., and said last year it would target the U.S. retail market for acquisitions. Fast Retailing sees "potential top-line synergies" in buying Barneys.

For Jones, though, analysts believe the upscale unit has allowed Jones to "lessen its dependence on selling its wholesale lines to department stores." Should Jones decide to break up the in-place deal with Istithmar, it will have to pay Dubai a $20.6 million breakup fee, or $22.7 million if terminated after July 22. So far, however, the deal is still on the table.

Either way, a purchase of Barneys would show the increasing desire for upscale retail, and the increasing desire of companies from countries like Dubai and Japan to further expand into the U.S. market.

Don't feel too badly for Istithmar if their Barneys deal falls through. The firm also reportedly has interests in clothing retailer Loehmann's Holdings, various commercial buildings in New York and London, and investment bank Perella Weinberg Partners.

Istithmar has competition in its quest to acquire Barneys from the Jones Apparel Group (NYSE: JNY). Japan's Fast Retailing Co has come forward with a $900 million bid, $75 million more than Jones had agreed to sell the unit for to the Dubai-based investment group.

Jones says it will begin talks with Fast Retailing. According to the Associated Press, "Headquartered in the western prefecture of Yamaguchi, Fast Retailing Co. operates the popular casual clothing chain Uniqlo. The retailer has expanded aggressively overseas, in such markets as Britain and continental Asia, with ambitions to challenge U.S.-based Gap Inc. It opened its global flagship Uniqlo store in New York City last September."

This should be interesting to follow, as investors from Japan and Dubai are battling for Barneys New York. Fast Retailing's offer is about 9% better than the agreement with Istithmar, and could lead to higher valuations for other high-end department stores like Bloomingdales, owned by Macys (NYSE: M).

Shares of Jones New York are up about 5% in pre-market trading.

Analysts are expecting Jones Apparel Group Inc (NYSE: JNY) to announce a sale of upscale fashion retail chain Barneys New York any minute now. Sources have indicated Jones CEO Peter Boneparth is looking to sell the chain because of a decline in the company's stock price -- shares closed yesterday at $28.36, while trading in January for over $35. Additionally, having failed to sell the entire company nearly a year ago, Mr. Boneparth may be looking to take advantage of the highly competitive market for luxury goods.

Because of the desire for luxury goods, Barneys has been sought after by publicly-traded companies as well as private-equity groups. There is strong market speculation that Istithmar, the investment arm of the Dubai government, could be the victor in the race for Barneys. Istithmar has a global real estate portfolio valued around $7 billion, including owning apparel retailer Loehmann's Holdings, and has been in hot pursuit of other U.S. properties over the past year. Sources close to the matter believe Istithmar could offer around $825 million for Barneys.

In addition to Istithmar, rumors swirled recently that Neiman Marcus and Nordstrom Inc (NYSE: JWN) had been interested in the chain and considered making bids around in the $800 million to $850 million range price, but dropped out when both companies believed the price would escalate too high, perhaps as far as $1.4 billion.

A sale of Barneys would likely come, as the New York Times reported, as a "partial victory" for Mr. Boneparth. He had been oft criticized that he paid too high a price in 2004 for the chain, but may have the last laugh if the sale price turns out to be nearly twice as high.

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• William Ackman's Pershing Square Capital Management, whose firms holds about 15% of Ceridian Corporation (NYSE: CEN), doesn't like the proposed $5.3B sale of the company to Thomas H. Lee Partners and Fidelity National Financial Inc (NYSE: FNF), and says he's going to find higher bidders, according to the Wall Street Journal.
• The Financial Times reported that British bank Barclays PLC (NYSE: BCS) has drawn up plans to sweeten its $86B all-share offer for Dutch bank ABN Amro Holdings (NYSE: ABN), by substituting cash for some of the shares it is currently offering for ABN.
• Beginning today, Apple Inc (NASDAQ: AAPL) is embedding its iTunes internet music download service in the British and Irish social networking site Bebo, reported the Financial Times.

OTHER PAPERS:

• The New York Post has learned that a private-equity firm owned by the Dubai government is close to buying Barneys New York from the Jones Apparel Group (NYSE: JNY).
• The New York Times reported that the Wall Street Journal is set to "shake up its newsroom" by reassigning and replacing several top editors.
• Golf equipment maker Callaway Golf Company (NYSE: ELY) is suing Fortune Brands Inc.'s (NYSE: FO) Acushnet Co, for allegedly violating five Callaway patents for golf clubs, reported the Los Angeles Times.

MAJOR PAPERS:

• Morgan Stanley (NYSE: MS) is about to purchase 13 hotels from All Nippon Airways for about $1.2B, doubling the number of hotels the investment bank owns there, reported the Wall Street Journal.
• The Financial Times reported that Apple Inc (NASDAQ: AAPL) announced it would delay shipping its new Leopard operating system until October, due to the summer launch of its iPhone.

OTHER PAPERS:

• According to the New York Times, citing people briefed on the discussions, Sallie Mae (NYSE: SLM) is in talks to be acquired by private equity for more than $20B.
• The Guardian reported that exiled Russian tycoon Boris Berezovsky is planning the "violent overthrow of [Russian] President Putin".
• The New York Post reported that Dubai is looking at buying Jones Apparel Group Inc's (NYSE: JNY) Barneys New York for $950M. Contrary to previous reports, the suitor is not linked to Qatar's royal family, but is Istithmar, a private equity firm owned by the Dubai government.

WEBSITES:

• According to sources familiar with the matter, Apple has plans to release new iPods with Wi-Fi, reported DigiTimes.com.