Lulu’s fashion show plans an IPO valuation of up to $ 707 million

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Fashion’s flight to Wall Street continues with Lulu’s Fashion Lounge Holdings Inc.

The Chico, Calif.-Based digital native pegged his initial public offering range at $ 16 to $ 19 per share, valuing the women’s fashion brand between $ 595 and $ 706.6 million.

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Lulu plans to sell 5.8 million shares to the public, resulting in approximately $ 89 million in proceeds at the midpoint of the offering of $ 17.50. The company plans to use that money to pay off a $ 71.4 million term loan and repurchase $ 17.9 million in preferred shares.

The process, underwritten by Goldman Sachs & Co., BofA Securities and Jefferies, will place the company on the Nasdaq open market under LVLU.

Lulu arrives on the scene with the already raging IPO party – a curious combination of the ultra-hot stock market, a surprisingly strong pandemic consumer, and a love for all things digital that has drawn companies to the market. Marlet.

Already Rent the Runway, Olaplex Holdings, Warby Parker, On Holding and many more have gone public. Allbirds should join them soon.

Lulu’s offering will be something of an introduction for many in the industry as the company, founded in 1996, has operated largely under the radar.

The company was hit hard in the pandemic’s first year – revenue fell 32.7% to $ 248.7 million last year with losses of $ 19.8 million. But Lulu started to bounce back in the first half of her year. Sales increased 23.6% to $ 172.5 million for the six months with net profits of $ 4.2 million.

“Unlike traditional retailers, we are leveraging a ‘test, learn and replenish’ strategy to bring hundreds of new products to market every week; we test them in small batches, learn from customer demand, and then quickly rearrange the higher volume winning products to optimize profitability, ”the company said in its registration statement filed with the Securities and Exchange Commission. “This strategy allows us to quickly convert new products into profitable sales on a consistent and repeatable basis while minimizing fashion and trend risks. “

Lulu’s produced an average of 236 new products each week during the first half of the year. The brand had around 2.5 million active customers in the 12 months ended October 3. Average unit retail prices are $ 50, which the brand describes as “affordable luxury.” Lulu considers herself a style agnostic, but is particularly known for her millennial and millennial-focused dresses and formal wear.

Since April, Lulu’s has been led by Managing Director David McCreight, who was previously CEO of the Anthropology Group of Urban Outfitters Inc. and before that, President of Under Armor Inc.

After the leader, HIG Growth Partners will continue to own 35.1% of the company. Institutional Venture Partners and the Canada Pension Plan Investment Board will each hold 17.9 percent of the Units.

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