Lulu’s Fashion Lounge Holdings Inc. has filed for an initial public offering, the latest retailer seeking to tap equity markets to fuel its growth.
Lulu’s, based in Chico, Calif., some three hours northeast of San Francisco, is seeking to sell $100 million worth of shares, although that figure is often a placeholder used to calculate filing fees.
The online fast-fashion retailer aims at younger women and teens. The shares would trade on the Nasdaq under the symbol LVLU. Underwriters include Goldman Sachs and B. of A. Securities.
Lulu’s said it has been profitable this year and that one of its strengths is the ability to use “data to optimize almost all elements of our business,” including product creation.
“Unlike traditional retailers, we leverage a ‘test, learn, and reorder’ strategy to bring hundreds of new products to market every week,” Lulu said in its prospectus. The company tests new offerings in small batches, learns about customer demand and then quickly reorders “winning products in higher volume to optimize profitability,” it said.
“This strategy allows us to rapidly convert new products into profitable sales on a consistent and repeatable basis while minimizing fashion and trend risk,” Lulu’s said. Traditional brick-and-mortar retailers are “under pressure,” from their longer product cycle and failure to keep up changing consumer tastes, it said.
Lulu’s listed revenue of $54.5 million in the three months ended on Sept. 27, 2020, and estimated revenue between $104.5 million and $106.2 million for the three months ended on Oct. 3.
It listed profit of $377,000 for the year-ago period and estimated profit between $3.3 million and $3.9 million for the current-year period. That expected increase would come from “higher gross profit,” partially offset by higher selling and marketing expenses and other costs, Lulu’s said.
For the six months ended in July, Lulu’s listed net earnings of 24 cents a share on sales of $173 million. That contrasted with a net loss of 92 cents a share on sales of $140 million in the same period in 2020.
The IPO market has already raised more money this year than in 2000, during the dot-com boom. Recent IPOs in the retail industry include shoe company Allbirds Inc. and fashion rental company Rent the Runway.