NEW YORK (CNN/Money) - While Wall Street grapples with the recent flurry of retail mergers, industry watchers say investors could also see the retailer IPO market rev up.

"There's definitely a few strong performers out there that have stayed under the radar," said Neil Stern, retail analyst and senior partner with Chicago-based retail consultancy McMillan/Doolittle, who's kept his ear to the ground for clues on the next generation of retail concepts to watch.

"There's no hard and fast rule that you can apply to figure out which companies may be ready for an IPO [initial public offering]," he added. "But one rule of thumb that we do consider is spotting companies that have grown to $100 million or more in projected sales in a relatively short period of time."

Using that criterion, Stern offered his picks of retailers that may be worthy IPO candidates:

-- Forever 21: Stern thinks this Los Angeles-based retailer of trendy teen fashions is inching closer toward an IPO. The privately-held company recorded sales of over $500 million in its previous fiscal year. Its growth is on a fast track. The retailer has been expanding at a rate of 35 new stores a year for the past 5 years and currently operates over 200 mostly mall-based stores.

Earlier this month, Forever 21 acquired bankrupt teen apparel retailer Gadzooks for about $33 million. Stern said the acquisition would allow the Forever 21 to significantly expand its retail footprint nationwide by adding the existing 150 Gadzooks stores to its own store count.

"Forever 21 has the option to operate either a second format or convert those Gadzooks stores into its own brand," said Stern. Either way, he said the company already has build a strong following with its target consumers who like its philosophy of selling "fast fashions" or clothes that are at once trendy and cheap.

-- Anna's Linen: "This is a company that has proven that it has unique attributes and can provide a value-based alternative in home furnishings to chains like Bed, Bath & Beyond and Linens' 'N Things," Stern said.

The California-based company's motto is to "Sell steak cheap, not cheap steak." It operates 135 stores in 11 states, selling bath, bedding and home decor items at discount prices. The company does not disclose its annual sales.

Said Stern, "Anna's Linen stores are mostly in what are called 'B' type locations or strip malls. We think that there's a lot of real estate currently available in that format. The other positive for the retailer is its appeal to ethnic communities, which we believe are underserved in the value-priced home furnishings arena."

-- Steve and Barry's: The New York-based company historically opened stores primarily in university towns to sell licensed collegiate merchandise. "They've broadened their appeal and are opening new stores away from campuses," Stern said.

Founded in 1985, Steve & Barry's has become one of America's fastest-growing national mall-based concept, Stern said, doubling in size in both 2003 and 2004.

While its stores are getting bigger, averaging about 100,000 square feet, the retailer has managed to expand its customer base beyond the student community by keeping most item it sells, whether its a cap, shirts, shoes or jackets, under $10. The company does not disclose its annual sales.

-- Five Below and babystyle: Don't expect IPOs any time soon from either of these two companies. "But that could definitely happen in a few years," said Stern.

Philadelphia-based Five Below's strength is its unique approach of using the popular appeal of a dollar store concept to create a store catering exclusively to the lucrative teens and tweens market.

"All the merchandise in Five Below is under $5, whether it's toys, sporting goods, novelty items or accessories," said Stern. "This is a retail concept that can potentially grow very, very fast."

Babystyle, the California-based seller of maternity clothes, baby clothes and baby furniture, is another name to watch out for.

"It's a very small company right now but its got the right idea of providing a one-stop shop for specialty products catering to expectant mothers and young children," Stern said. In addition to its 10 store locations, consumers can also shop for babystyle products online at the retailer's web site as well as through its catalog.

Calls to Forever 21, Anna's Linen and Steve & Barry's by CNN/Money were not immediately returned. Five Below and babystyle also could not be reached for comment.

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