A campaign image for Australian online beauty retailer Adore Beauty.

SYDNEY Beauty is officially hot property in Australia, with the country’s oldest pure-play online beauty retailer Adore Beauty making a confident debut on the Australian Securities Exchange on Friday Australia time.

The year’s biggest initial public offering and the largest, female-led Australian market float, the 20-year-old, Melbourne-based e-commerce company raised 269.5 million Australian dollars, or $192 million at current exchange, at 6.75 Australian dollars, or $4.80, a share. This gave Adore Beauty a valuation of 653.5 million Australian dollars, or $464.4 million — 3.9 times the company’s forecast calendar 2020 sales of 158.2 million Australian dollars, or $112.4 million.

At one point in early afternoon trading, the shares were up as much as 10 percent to 7.42 Australian dollars, or $5.27, before closing at 6.92 Australian dollars, or $4.92, up 2.5 percent.

Launched in April 2000 by 21-year-old Melbourne student Kate Morris and her partner James Height out of Morris’ garage, with 12,000 Australian dollars, or $7,157 at April 2000 exchange, in start-up capital loaned from Height’s father, Adore Beauty today sells 11,000 products across more than 230 brands, the latter a mix of professional, prestige, niche and masstige names, with 590,000 active customers and 18.5 million users across its Australian and New Zealand web sites.

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Adore Beauty cofounders and executive directors Kate Morris and James Height.  Eamon Gallagher

Skin care, the company’s biggest category, which accounts for 57 percent of sales, includes brands such as Aspect, Skinstitut, Alpha-H, Beauté Pacifique, Cosmedix and SkinCeuticals, for which Adore Beauty is the exclusive online stockist in Australia.

In September 2019, Morris and Height sold a 60 percent stake to Sydney-based private equity firm Quadrant Growth Fund.

On the back of the COVID-19 pandemic, during which the company saw a surge in sales for candles, bath products and skin care, sales surpassed 100 million Australian dollars for the first time in fiscal 2020, to reach 121.1 million Australian dollars, or $83.9 million at average exchange for the year, 65.5 percent up from 2019.

The pandemic-fueled e-commerce boom also fast-tracked the company’s IPO plans, said Morris.

“We had sketched out a plan for where the business needed to be in terms of our active customer base and the sales, like a little roadmap in terms of where we wanted to be and then COVID-19 kind of accelerated things quite a lot,” said Morris. “All of a sudden we were already there.”

An Adore Beauty mobile app is due to launch by yearend, with private-label product and a loyalty program to follow in 2021. After launching into the New Zealand market in 2019, further international expansion is also on the cards.

According to analyst Gaurav Sodhi, deputy head of research at InvestSmart Group, Morris and her team could potentially have a unicorn on their hands.

“It’s a terrific company, it’s well-managed, it has diligently built up a dedicated following over two decades, all the metrics are great,” said Sodhi.

“I think there’s a very good chance that this hits a billion [Australian] dollars. There are so many ways for this company to grow,” Sodhi added.

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