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Strategies & Market Trends : Can you beat 50% per month? -- Ignore unavailable to you. Want to Upgrade?

To: Smiling Bob who wrote (10249)	6/28/2006 7:59:12 PM
From: Smiling Bob	Read Replies (1) \| Respond to of 19256

LOS ANGELES, June 13 (Reuters) - J. Crew Group Inc., the clothing retailer owned by private equity giant Texas-Pacific Group, plans to offer up to 18.8 million shares for $15 to $17 a share in an initial public offering, according to a regulatory filing on Tuesday. Assuming the offering prices at $16, the mid-point of the expected range, the company would have an initial market capitalization of about $910 million. A deal of that value would give J. Crew shares a multiple of about 18 times trailing 12-month earnings, said Francis Gaskins, an independent analyst and president of IPO Desktop. In comparison, rival apparel retailers Gap Inc. (GPS.N: Quote, Profile, Research) and Limited Brands (LTD.N: Quote, Profile, Research) trade at about 14 and 15 times past earnings, respectively. "It's a little high, but not if they can achieve their expansion plans," said Gaskins, who added that the IPO would cut the company's interest payments by about $50 million per year and free up cash to open new stores. J. Crew said in the filing that it opened six stores in fiscal 2005. It plans to open 15 to 30 stores in fiscal 2006. After that, it plans to open between 25 and 35 stores annually. Gaskins said the company's success would depend on the health of the economy and its ability to continue posting increases in same-store sales. Texas-Pacific Group bought J. Crew in 1997 and is expected to own as much as 40 percent of the company after the offering, according to the filing with the U.S. Securities and Exchange Commission. Underwriters led by Goldman, Sachs & Co. and Bear, Stearns & Co. Inc. have the option to purchase an additional 2.8 million shares to cover over-allotments, according to the filing. © Reuters 2006. All Rights Reserved. yahoo.reuters.com