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Body Central IPO: specialty women's retailer

|Includes:AEO, ANF, ARO, BEBE, Body Central Corp. (BODY), PSUN, WTSL

Body Central  (OTCPK:BODY), $75mm IPO, market cap of $231mm
at price range mid-point of $15
Scheduled for Friday, October 15, 2010

BODY financial analysis

SUMMARY
. Relatively small specialty retailer of clothes for younger women
. Priced at 20x annualized earnings for the six months ended June 30
. Plans to open 15% more stores for the next several years
. Comparable store sales increased 13.5% for the six months ended June 20, 1010

BUSINESS
. Specialty retailer:  women’s clothes
. Retail stores, e-commerce & catalog
. 83% of revenue from stores
. Targets women in their late teens & twenties from diverse backgrounds
STORE BASE
. 204 stores in 23 states as of September 30, 2010
. Average size of 4,300 square feet, located in fashion retail venues in the South, Mid-Atlantic and Midwest.

COMPARABLE STORE SALES
Comparable store sales increased $10.4 million, or 13.5%, for the twenty-six weeks ended July 3, 2010 compared to an increase of 5.8% for the twenty-six weeks ended July 4, 2009

GROWTH PLAN
. Expects to open more than 25 new stores in fiscal year 2010 (of which 22 were already open as of September 30, 2010)
. And expects to open approximately 30 to 35 new stores in fiscal year 2011.
. BODY believes it can continue to open new stores at an annual rate of 15% for the next several years.

SEASONAL
. Revenues typically higher in the second and fourth quarters.
. Revenues generated during the second quarter and the holiday selling season generally contribute to the relatively higher second quarter and fourth quarter net income.

COMPETITION
Forever 21, Wet Seal, rue21, Charlotte Russe and Aéropostale.

PRIVATE EQUITY CONTROLLED
In 2006, the founding family sold a controlling interest in the company to an investor group led by WestView.

USE OF PROCEEDS
$44mm from sale of 3.3mm shares, shareholders intend to sell 1.6mm shares
. $31.5mm to repay debt
. $3.5 million (as of July 3, 2010) to redeem all outstanding shares of our non-convertible, non-voting Series C preferred stock;
.  up to an aggregate of $1.0 million to specified employees,
. Balance of $8mm for working capital

BODY financial analysis




Disclosure: none

Stocks: BODY-OLD, ARO, ANF, PSUN, AEO, WTSL, BEBE