Lulu’s Fashion Falls in Debut After IPO at Low End of Range

(Bloomberg) -- Lulu’s Fashion Lounge Holdings Inc., an ecommerce company focused on millennial and Gen Z women, dropped 18% in its trading debut after raising $92 million in an initial public offering priced at the bottom of a marketed range.

Lulu’s shares closed at $13.06 Thursday in New York trading, giving the company a market value of $486 million. The company sold 5.75 million shares for $16 each Wednesday after offering them for $16 to $19.

Chief Executive Officer David McCreight said the low-end pricing of the IPO and first-day drop won’t affect the company’s plan to pay down debt.

“The market is going to do what the market is going to do,” McCreight said in an interview. “We put out just enough to accomplish our goals.”

The company’s business model -- including its practice of buying smaller lots and testing customer interest -- has proved effective, especially during the coronavirus pandemic, he said.

Lulu’s had net income of almost $7 million on net revenue of $173 million for the six months ended July 4, compared with a net loss of $16 million on $140 million in revenue for the comparable period a year earlier.

The company’s investors include affiliates of H.I.G., Institutional Venture Partners and Canada Pension Plan Investment Board.

Lulu’s said in its filings that its co-founders, Debra Cannon and Colleen Winter, were leaving the board with the listing.

The IPO was led by Goldman Sachs Group Inc., Bank of America Crop. and Jefferies Financial Group Inc. The company’s shares are trading on the Nasdaq Global Market under the symbol LVLU.
 

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