Seeking Alpha
Profile| Send Message|
( followers)  

Gordmans Stores (NASDAQ:GMAN), a low price apparel retailer, priced its IPO on 4th August at $11 per share, below the expected range of $13 - $15 per share, generating first day return of 0.3%.

Business Overview (from prospectus)

Gordmans is an everyday low price retailer featuring a large selection of the latest brands, fashions and styles at up to 60% off department and specialty store prices every day in a fun, easy-to-shop environment. Our merchandise assortment includes apparel for all ages, accessories, footwear and home fashions. In fiscal year 2009, our major merchandise categories of Apparel, Home Fashions and Accessories comprised 53%, 29% and 18%, respectively, of our total revenue. The origins of Gordmans date back to 1915, and as of June 4, 2010, we operated 68 stores in 16 primarily Midwestern states situated in a variety of shopping center developments, including regional enclosed shopping malls, lifestyle centers and power centers.

Offering: 5.4 million shares (includes 2.2 million by selling stockholders) at $11 per share. Net proceeds of approximately $16.0 million will be used for debt repayment and approximately $7.5 million termination fee to affiliates of Sun Capital.

Lead Underwriters: Piper Jaffray (NYSE:PJC), Wells Fargo Securities (NYSE:WFC)

Financial Highlights:

Net sales for the thirteen weeks ended May 1, 2010 increased $18.4 million, or 19.7%, to $111.9 million as compared to $93.5 million for the thirteen weeks ended May 2, 2009...Gross profit inclusive of license fee income, for the thirteen weeks ended May 1, 2010 increased $10.2 million, or 24.2%, to $52.5 million as compared to $42.3 million for the thirteen weeks ended May 2, 2009...Selling, general and administrative expenses for the thirteen weeks ended May 1, 2010 increased $6.0 million, or 16.4%, to $42.3 million as compared to $36.3 million for the thirteen weeks ended May 2, 2009...Income before taxes for the thirteen weeks ended May 1, 2010 increased $4.4 million, or 75.8%, to $10.1 million as compared to $5.7 million for the thirteen weeks ended May 2, 2009...Net income for the thirteen weeks ended May 1, 2010 increased $2.7 million, or 75.5%, to $6.4 million as compared to $3.6 million in thirteen weeks ended May 2, 2009...

Competitors

We face substantial competition for guests from regional and national department stores, specialty stores, discount stores, mid-tier stores and off-price retail chains. We compete on the basis of a combination of factors, including among others, price, breadth, quality and style of merchandise offered, in-store experience, level of guest service, ability to identify and offer new and emerging fashion trends and brand image. Many of these competitors are larger and have significantly greater financial and marketing resources than we do. Many of our competitors also generate ecommerce sales, and although we do maintain a website, we do not sell merchandise online. Accordingly, we may face periods of intense competition in the future which could have a material adverse effect on our profitability and results of operations. We cannot assure you that we will continue to be able to compete successfully against existing or future competitors. Our expansion into markets served by our competitors and entry of new competitors or expansion of existing competitors into our markets could have a material adverse effect on our profitability and results of operations.

Additional Resources:

Source: Gordmans Stores Prices IPO Below Range