Advent's women's retailer Charlotte Russe prepares for IPO -sources

Wed Oct 23, 2013 12:04pm EDT

Oct 23 (Reuters) - Women's apparel and accessories retailer Charlotte Russe Inc, owned by private equity firm Advent International Corp, is speaking to banks about an initial public offering that may come next year, two people familiar with the matter said this week.

Favorable market conditions have driven buyout firms to cash in on some of their better-performing retail investments, such as Leonard Green & Partners LP's Container Store, which is also on track for an IPO, and Bain Capital LLC's Burlington Stores Inc, which went public this month and whose shares jumped about 50 percent on their first day of trading.

Buoyed by a more optimistic economic outlook, retail stocks have outperformed the broader market so far this year, with the Standard & Poor's Retail Index up 32 percent compared with a 23 percent rise in the S&P 500 Index.

The sources asked not to be identified as disclosing private discussions about the IPO. Advent International declined to comment, while Charlotte Russe representatives did not respond to a request for comment.

San Francisco-based Charlotte Russe is a mall-based chain with more than 500 stores across the United States. It operates in the so-called fast fashion industry, which markets trendy clothes that are manufactured cheaply and quickly, and competes with retailers such Forever 21 and H&M.

Advent took Charlotte Russe private for $380 million in 2009. Since then the retailer's earnings before interest, tax, depreciation and amortization have more than doubled to just under $70 million on the back of seven straight quarters of positive comparable-store sales, according to Thomson Reuters Loan Pricing Corp.

The retailer has annual sales of about $856 million, according to Moody's Investors Service Inc.

Charlotte Russe President Jenny Ming, the former head of Gap Inc brand Old Navy, is largely credited with helping to turn around the once-struggling brand.

Advent has invested in several other retail companies, including Five Below Inc, Party City and Lululemon Athletica Inc.