Rue21 IPO set to begin trading; prices above range

posted: 88 DAYS 19 HOURS AGO

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NEW YORK -Shares of rue21 Inc. are set to begin trading, now that the trendy clothing retailer has priced its initial public offering above underwriters' expectations.

Rue21 said its public offering of about 6.8 million shares priced at $19 per share, raising $128.6 million. The shares priced above an expected range of $16 to $18 per share.

The company sells clothing designed to appeal to people wanting to look and feel 21 years old. It operates more than 500 stores in 43 states.

Warrendale, Penn. Rue21 offered about 1.7 million shares, while selling stockholders offered 5.1 million shares.

The company expects to receive proceeds, after expenses, of $29.2 million and will use the money to pay down debt and for working capital and other general corporate purposes.

For the 13 weeks ended Oct. 31, sales increased 41 percent $137.1 million as it opened more stores. Sales at stores open more than a year rose 13.5 percent during the period.

Profit for the fiscal year ended Jan. 31 rose to $12.6 million, or 55 cents per share, from $9.1 million, or 40 cents per share, in 2008.

The IPO market has been heating up recently. On Thursday, another retailer, discounter Dollar General Corp. priced its IPO of 34.1 million shares at $21 a share, but that was at the low end of its expected price range of $21 to $23. Both companies are expected to begin trading on Friday.

The company will trade on the Nasdaq under the ticker symbol "RUE." Dollar General will trade on the New York Stock Exchange under the symbol "DG."

Rue21's Underwriters include Bank of America Merrill Lynch, Goldman Sachs & Co., and J.P. Morgan.

2009-11-13 08:33:19