Francesca’s (FRAN) looking good

Francesca’s Holdings Corporation (Holdings), incorporated in 2007, is a holding company. The Company’s business operations are conducted through its wholly owned indirect subsidiary, Francesca’s Collections, Inc. (Francesca’s Collections), which is wholly owned by Francesca’s LLC (Parent). Holdings operates under its trademark, francesca’s collections. The Company operates a national chain of retail boutiques designed and merchandised. Its francesca’s collections is a specialty retailer in the United States. Holdings's retail locations are designed and merchandised as owned, upscale boutiques. In February 2010, CCMP Capital Advisors, LLC (CCMP) acquired an 84% interest in the Company from the Founders and Bear Growth Capital Partners, LP (BGCP).

Holdings offer a range of fashion apparel, jewelry, accessories and gifts. As of April 2, 2011, Holdings had a boutique base in 236 locations in 38 states. The Company’s merchandise is also available through its e-commerce Website, www.francescascollections.com. Through Holdings’s Website, its customers are able to purchase individual items or recommended full outfits, shop the latest jewelry, gift or fashion merchandise and special promotions, create a wish list, sign up for its mailing list, connect and follow the Company on social media sites, such as Facebook and Twitter, as well as obtain current information on its boutique locations.

The Company distributes all of its merchandise from its distribution center (located within its corporate headquarters) in Houston, Texas. Holdings’s 1,400 square foot boutiques carry approximately 3,000 stock keeping unit (SKUs) at any one time and it stocks about 15,000 different styles in a year. Majority of its merchandise is sold under its labels (85% of apparel sales, during the fiscal year ended January 30, 2010 (fiscal 2010)).

The Company competes with White House Black Market, Ann Taylor Loft, Charlotte Russe, Brighton Collectibles and Anthropologie.

Francesca's raises $170M from IPO of 10M shares

Women's boutique chain Francesca's Holdings Corp. said Friday that it raised $170 million from its initial public offering of 10 million shares.

The IPO was priced at $17 per share, above the $14 to $16 range the Houston company had expected the stock to fetch.

Francesca's is offering about 2.9 million of the shares in the offering. Selling shareholders, which include CCMP Capital Advisors LLC affiliates, are offering approximately 7.1 million.

The underwriters have the option to buy up to 1.5 million more shares from certain selling stockholders.

Francesca's will not receive any proceeds from shares sold by the selling stockholders. The company said in a recent regulatory filing that it anticipated net proceeds of about $44.1 million, after taking out expenses and the underwriter's discount and commissions. That anticipated amount was based on the stock being priced at $15 per share, the midpoint of its price range.

Francesca's plans to use its proceeds, coupled with borrowings from a revolving credit agreement, to pay off an existing credit line.

The shares will trade on the Nasdaq Global Select Market under the "FRAN" ticker symbol.

Francesca's boutiques are targeted to women between 18 and 35 and sell clothing, jewelry, accessories and other items. The company had net income of $16.9 million on revenue of $135.1 million for the fiscal year ended Jan. 29.

July a hot month for IPOs

July is turning into one of the hottest months in recent memory for initial public offerings.


Already this month, several high-profile companies including Zillow, Skullcandy and Francesca’s have begun selling shares publicly. Capping off the month, shares in Dunkin’ Brands are widely expected to start trading this week, along with a handful of other companies.

The rash of offerings comes as the IPO market finally starts to thaw after several years of economic uncertainty, more recently compounded by worries about the national debt. Those worries have delayed some offerings, but now many companies are moving forward.

"You have a big backlog of deals in the pipeline — quality-type companies, well-known companies — that are starting to muscle past this blockage," said John Fitzgibbon, founder of IPO Scoop.com.

Fizgibbon's website lists at least 18 companies that either are expected to begin trading this month or already have completed their IPOs. That could make this the busiest July since 2007, before the onset of the credit crisis.

The busy month comes on the heels of several other highly publicized public offerings earlier this year from well-known Internet companies including LinkedIn and Pandora.


The "rocket-shot" opening days seen in some of the offerings, such as Zillow's explosive debut , have inevitably revived memories of the dot-com boom and subsequent bust. But experts say that despite the renewed excitement about public offerings, things are far tamer than a decade ago.

"This isn’t like insanity-dot-com of 1999 and 2000," Fitzgibbon said.

Investors, many of whom were battle-scarred by the big bets and big losses of the dot-com era, appear to be paying closer attention now to whether these new companies have shown true potential for shareholders.

"Investors appear to be a bit more savvy, a bit more informed, and they’re not just picking anything that’s coming down the line," said David Menlow, president of IPOfinancial.com.


Many of the companies going public this month can point to stronger foundations than generally seen in the dot-com era, when hot frequently companies rushed to the public markets with little evidence of how they planned to turn a profit in the years to come.

Zillow, the online real estate marketplace that went public last week, has been methodically building and expanding its business since its founding in 2004. Dunkin’ Brands, which is expected to go public this week, is parent to a well-known consumer brand that has been around for more than 50 years.

Still, even a longer track record and a hot brand is no guarantee that these initial public offerings will do well. Economic conditions are improving quite slowly, and investors remain skittish.

Shares in LinkedIn, the social networking site for jobseekers, dipped sharply shortly after the company went public in May, although shares have recovered in recent weeks.

Pandora Media, the Internet-based music offering, also saw shares fall following its debut on the public market in June.

Another hotshot social media company, Groupon, attracted some skepticism earlier this year after revealing plans to file for an IPO – along with a record of hefty losses. Still, many are hotly awaiting the daily deal company’s public offering.

And of course there is wild and incessant speculation about when social media’s 800-pound gorilla, Facebook, might finally begin selling its stock to the general public.