Plus-Size Retailer Torrid Hits $2.5B Valuation After IPO
Torrid Holdings Inc. has been around as a brand for two decades, helping plus-size women look and feel good in garments tailored to complement their curves. But with Gen Z pushing cultural shifts that celebrate inclusivity and body positivity, it appears Torrid is just getting started.Get more news about
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“We are definitely at the intersection of something very big that’s happening, and it’s a good time to service this customer,” said Elizabeth Muñoz, chief executive of the City of Industry-based retailer.
“I think this industry has tried to shame big girls into getting thinner, and clearly that hasn’t worked. I love that we’re going to just embrace women and accept them and really push them to accept themselves for what they are. I always tell women the best body you have is the one you’ve got right now and stop waiting for life to start when you get another one. I’m excited about the movement.”
Apparently, so is Wall Street. Torrid’s July 1 debut on the New York Stock Exchange under the CURV ticker symbol went well — its shares opened at $21 and at market close were trading at $24, or 14% above the initial price.
The company offered 11 million shares and raised $230 million, for a valuation of about $2.3 billion. Torrid’s largest shareholder, Sycamore Partners Management in New York, will retain approximately 77% of the voting power, down from 84.7% prior to the listing.
Muñoz, who along with other members of Torrid’s management team got to ring the NYSE’s closing bell, described the debut as “an extraordinary step toward really becoming a household name and reaching all these women out there that have not found us.”Sycamore picked up Torrid in 2013 as part of its $600 million acquisition of Hot Topic Inc. The brand had operated as a Hot Topic subsidiary since its launch in 2001.
Torrid was spun off as a stand-alone company in 2015 but continued to share back-office services with former parent Hot Topic, including information technology, distribution and logistics management.
Last week’s market debut was Torrid’s second attempt at going public. It first filed for an IPO in July 2017 but retracted the filing in April 2019, stating that the withdrawal “would be consistent with the public interest and the protection of investors,” according to documents filed with the Securities and Exchange Commission.
The company appeared to do well without the public funds — during its fiscal year that ended Feb. 1, 2020, Torrid generated a record $1.03 billion in net sales, a 14% increase compared to its fiscal 2019. It also reported $41.8 million in net income.
The company’s top line took a 6.1% hit last year due to pandemic-related store closures. It reported a $63.5 million dip in net revenue to $973.5 million and income of $24.5 million.
The decreases reflected significant declines in brick-and-mortar sales that were partially offset by increases in ecommerce. Online orders represented 42% and 48% of Torrid’s net sales in 2018 and 2019, respectively. In 2020, ecommerce sales represented 70% of net sales.
