Express IPO shares get lukewarm reception

NEW YORK — Express Inc. shares got a lukewarm reception Thursday, after the seller of trendy jeans and T-shirts' initial public offering priced below expectations.

The Columbus, Ohio, company raised $166.9 million, after expenses, from an IPO of 16 million shares priced at $17 per share. Previously, the company expected to sell shares for as much as $20 apiece. Underwriters have an option to buy up to an additional 2.4 million shares from selling stockholders.

Shares fell 8 cents to $16.92 in afternoon trading. The stock has traded as low as $16.85 and as high as $17.40.

A fixture in malls, the 30-year-old chain says it is the sixth largest specialty retail apparel brand in the U.S.

It opened its first store in Chicago in 1980 as a division of Limited Brands Inc., and branched out into men's clothing in 1987.

Express grew rapidly in the 1990s and operated about 1,000 stores by 2000. But its results were weaker than other Limited Brands chains, which include Victoria's Secret and Bath and Body Works.

"It was an underperformer in Limited Brands' portfolio," said Brian Sozzi, an analyst with Wall Street Strategies.

In 2007, Limited Brands sold majority stakes of both its Limited and Express apparel chains to focus on its other chains. Golden Gate Private Equity Inc. bought a 75 percent stake in Express for $485 million.

Express, which now operates 573 stores, spent the years since its majority stake was sold improving its marketing process, launching an online store and revamping its clothing offerings. It changed its focus to casual and party wear and jeans rather than work outfits.

Results have been improving. The company reversed two years of losses during the year ended Jan. 30, when it reported net income of $75.3 million on revenue of $1.7 billion.

The chain said on April 30 that it expected revenue in stores open at least one year, a key measure of a retailer's financial health, to rise 10 percent to 12 percent in the quarter ended May 1, with net revenue up 11 percent to 13 percent.

It plans to open about 30 new stores a year for the next five years as the retail sector recovers from the recession.

Express will use some of the proceeds from the offering to prepay debt and make payments to Golden Gate Private Equity Inc., which bought 75 percent of the company from Limited Brands Inc. in 2007. Express has paid more than $556 million to Golden Gate in dividends.

Express Inc. shares are trading on the New York Stock Exchange under the ticker "EXPR."

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Associated Press Writer Tali Arbel in New York contributed to this report.