Three Retail IPOs: Ulta Salon Cosmetics & Fragrance, Fuqi International, FGX Holdings Interational

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Includes: FGXI, FUQI, ULTA
by: Abbi Adest

There are three retail IPOs on deck this week: Ulta Salon Cosmetics & Fragrance (NASDAQ:ULTA) a retailer of specialty cosmetics and fragrances; Fuqi International (OTCPK:FUQI) a Chinese jewelry maker; and FGX Interational Holdings (FGXI) a retailer of non-prescription reading glasses, sunglasses and costume jewelry.

All quotations are from the companies' most recent S-1 filings with links provided.

ULTA SALON COSMETICS & FRAGRANCE (ULTA)

Business Overview (from prospectus)

We are the largest beauty retailer that provides one-stop shopping for prestige, mass and salon products and salon services in the United States. We focus on providing affordable indulgence to our customers by combining the product breadth, value and convenience of a beauty superstore with the distinctive environment and experience of a specialty retailer.

Offering: 8.5million shares at $14.00 - $16.00 per share. Net proceeds of approximately $103.4 million will be used to pay accumulated dividends in arrears and to repay debt.

Lead Underwriters: J.P. Morgan, Wachovia Securities

Financial Highlights:

Net sales increased $176.0 million, or 30.4%, to $755.1 million in fiscal 2006 compared to $579.1 million in fiscal 2005... Gross profit increased $60.9 million, or 34.9%, to $235.2 million in fiscal 2006, compared to $174.3 million, in fiscal 2005... Selling, general, and administrative expenses increased $47.9 million, or 34.2%, to $188.0 million in fiscal 2006 compared to $140.1 million in fiscal 2005... Net income increased $6.5 million, or 41.2%, to $22.5 million in fiscal 2006 compared to $16.0 million in fiscal 2005.

Additional Resources:

FUQI INTERNATIONAL, INC. (OTCPK:FUQI)

Business Overview (from prospectus)

We are a leading designer of high quality precious metal jewelry in China, developing, promoting, and selling a broad range of products to the rapidly expanding Chinese luxury goods market. According to Global Industry Analysts, Inc., or GIA, China’s jewelry industry grew to $14 billion in 2005 and China is expected to lead global jewelry processing and consumption by 2010.

Offering: 6.4 million shares at $7.00 - $9.00 per share. Net proceeds of approximately $47.1 million will be used to expand retail operations, to expand product lines, and for general corporate purposes.

Lead Underwriters: Merriman, Curhan Ford, Brean Murray

Financial Highlights:

Net sales for the year ended December 31, 2006 increased to $92.4 million, an increase of $19.8 million, or 27.3%, compared to net sales of $72.6 million for the year ended December 31, 2005... Cost of sales for the year ended December 31, 2006 increased to $83.6 million, an increase of $18.6 million, or 28.6%, compared to cost of sales of $65.0 million for the year 2005... Gross profit for the year ended December 31, 2006 increased to $8.8 million, an increase of $1.2 million, or 15.8%, compared to $7.6 million for the same period in 2005... Selling and marketing expenses for the year ended December 31, 2006 were $490,000, a decrease of $134,000, or 21.5%, as compared to $624,000 for the year ended December 31, 2005... Net income increased to $5.8 million for year ended December 31, 2006 from $5.4 million for the year ended December 31, 2005, an increase of $0.4 million, or 7.4%.

Additional Resources:

FGX INTERNATIONAL HOLDINGS LIMITED (FGXI)

Business Overview (from prospectus)

We are a leading designer and marketer of non-prescription reading glasses, sunglasses and costume jewelry with a portfolio of established, highly recognized eyewear brands including FosterGrant and Magnivision. Our FosterGrant brand is a domestic market leader in the popular priced sunglasses market (less than $50). We believe that our share of this market is approximately 20%. Our FosterGrant and Magnivision brands, with a combined 39% share, are leaders in the domestic non-prescription reading glasses market. We also sell costume jewelry principally to major mass merchandisers, thereby extending our product penetration with key customers.

Offering: 8.3 million shares at $14.00 - $16.00 per share. Net proceeds of approximately $91.0 million will be used to repay debt.

Lead Underwriters: William Blair, Suntrust Robinson

Financial Highlights:

Net sales increased by $19.3 million, or 10.2%, from $189.9 million in fiscal 2005 to $209.2 million in fiscal 2006... Gross profit increased by $5.0 million, or 5.0%, from $99.3 million in fiscal 2005 to $104.3 million in fiscal 2006... Selling expenses increased by $8.3 million, or 17.6%, from $47.2 million in fiscal 2005 to $55.5 million in fiscal 2006... For the reasons described above, our net loss increased by $0.7 million, or 31.2%, from $2.3 million in fiscal 2005 to $3.0 million in fiscal 2006.

Additional Resources: