The flight to value has been cleared for landing on Wall Street.
Gordmans Inc., the 67-unit off-price department store chain operating in 16 Midwestern states, has filed plans with the Securities and Exchange Commission for a $75 million initial public offering, with proceeds slated for general corporate purposes, including new stores. “The Gordmans deal follows Express, Rue 21, Dollar General and Dollarama IPOs,” noted Chris Kampe, managing director at investment bank Tully & Holland Inc. “Specifically, they are either discount, value-oriented or off-price chains that have enjoyed strong recent performance and are riding the current consumer value wave, and thus have an appealing investment thesis.”
Headquartered in Omaha, Gordmans stores average 50,000 square feet. The filing said it plans to expand the store base by 10 percent annually over the next several years. The juniors and young men’s categories are considered destination businesses, and the firm said in its registration statement, Form S-1, that another goal is to “achieve parity between sales in women’s and juniors’ apparel categories.”
The stock is expected to trade on the Nasdaq Global Select Market under the symbol GMAN.
The chain, which features merchandise at up to 60 percent off department and specialty store prices in apparel, accessories, footwear and home decor, posted income of $15.9 million, or $15.33 a diluted share, on sales of $457.5 million for the year ended Jan. 30. Same-store sales rose 4.6 percent. The company also had $5.7 million in licensing fee income through licensed department arrangements with DSW Inc. for shoes and Destination Maternity Corp. for maternity apparel.
Originally Richman Gordman, the retailer dates back to 1915. In the Seventies, the company also operated a second group of retail stores under the banner 1/2 Price Stores before the development of a store prototype that became the Gordmans operation. It was acquired by Midwest Shoppes Intermediate Holding Corp., an affiliate of Sun Capital Partners Inc., in September 2008.