Tween Brands rises as analyst praises plan

Last week, the New Albany, Ohio-based company said it would convert 600 Limited Too stores to its lower-priced Justice brand, giving the Justice chain about 900 stores--nearly triple its current size. Some of the Limited Too's clothing will continue to be sold in Justice stores, where most apparel is about 25 percent less than its sister chain.

Buckingham Research group analyst Barbara Wyckoff wrote in a note to investors on Wednesday that after a meeting with Tween Brands management to discuss the plan, she believes it "makes sense on many levels." The company will be able to "buy better" with more scale, save on expenses and simplify its merchandising processes.

"We further believe the consolidation was not an impulsive decision, but rather had been under review for the past year," wrote Wyckoff, who rates the company "Neutral."

She added that the change in brand strategy is an appeal to value shoppers who might shop at discount stores such as Wal-Mart Stores Inc. or Target Corp.

"However Tween Brands remains the only player in the tween space that serves this customer exclusively," Wyckoff wrote.

Shares rose 57 cents, or 5.8 percent, to $10.33. The stock has traded between $7.75 and $39.88 during the past 52 weeks.