Lulu’s joins bumper crop of retailers with intention to go public

Dive brief:

  • Lulu’s joins the hordes of retailers going public this year. The online fast fashion company, also known as Lulu’s Fashion Lounge Holdings, this week announced that she had filed a Form S-1 Declaration of registration with the United States Securities and Exchange Commission.

  • The number of shares to be offered and the price range of the proposed offer have not yet been determined, by Lulu’s press release.

  • Lulu’s, which plans to list on the global Nasdaq market under the symbol “LVLU”, is expected to be in the dark during its most recent quarter ended Oct. 3, with net income of $ 3.3 million, in substantial increase from $ 377,000 in net income in the period a year ago, according to S-1. But the e-merchant ended his last two years in the red, with net losses of $469,000 in 2019 and $ 19.3 million in 2020.

Dive overview:

Some may think that fast fashion is under intense pressure, in part because of the concerns of young consumers about the environment and working practices. Analysts at UBS and Moody’s warned earlier this year that fast fashion companies would lose customers as sustainability and transparency gain in importance and resale and other apparel segments benefit from the changing market dynamics.

But companies like Lulu’s and Shein might disagree, and, in fact, Lulu’s pretty much does in its flyer. The online retailer is postulating that it is a brick and mortar clothing retail business with gradation prospects, due to “a prolonged and unattractive merchandising and buying cycle, “wholesale profit margin and growth in online sales, especially from younger shoppers.

“Traditional clothing brands and retail models are under increasing pressure,” according to S-1. “From 2016 to 2019, we believe online penetration in the US apparel industry increased from 17% to 25%, and this category shift is expected to continue with online penetration reaching 38% by the end. of this year and 49% by 2025. Offline Retail models have generally failed to keep up with changing consumer preferences and are burdened with large footprints of inflexible physical stores, management challenges inventory, seasonality of demand and a highly promotional environment, with competitors seeking to capture all available sales to cover high fixed costs. “

Lulu’s said it started in 1996 as a brick and mortar store, “but amid the growing adoption by consumers of e-commerce and the growing influence of social media, we’ve moved to an online-only model in order to reach our target customer where they prefer to engage. engagement ”, watching revenue and customer base grow nationwide all the time.

The company on the record also boasted of its “efficient product development”, customer service, supply chain and data-driven marketing.

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