Discount retailer Ollie’s Bargain Outlet Holdings Inc.’s shares gained nearly a third in Nasdaq trading Thursday following an initial public offering that raised $142.8 million.
Ollie’s priced nearly 9 million shares at $16, above the expected range of between $13 and $15, late Wednesday as today’s IPO neared. At noon, they were selling at $21.55, $5.55, or 34.7 percent, above the offering price. The closed the day at $21.15, up $5.15 or 32.2 percent.
Ollie’s, based in Harrisburg, Pa., filed the preliminary paperwork for the IPO a month ago.
The company, which bills itself proudly for selling “good stuff cheap,” does the majority of its business in home-related merchandise and packaged foods, but apparel, electronics, sporting goods and a broad range of other categories account for almost a third of its sales. It claims to sell merchandise at 20 to 50 percent below mass marketers’ prices and 70 percent below prices at department and specialty stores.
Among the goals of the chain following the IPO is to expand its customer loyalty program, members of which are referred to as “Ollie’s Army.”
Last month, the company said it operated 181 stores in 16 contiguous states in the Northeastern U.S. Research conducted for the company by Jeff Green Partners found it could support a network of as many as 950 U.S. locations, providing it with ample runway for geographic expansion.
The company was acquired by CCMP Capital Partners LLC and members of its management team, including chief executive officer Mark Butler, in 2012 after being incorporated in Delaware that same year.
Last year, the company generated a 53.9 percent rise in net income, to $6.7 million, as sales grew 18 percent to $638 million. The compound annual growth rate for sales between 2010 and 2014 was 17 percent. For adjusted earnings before interest, taxes, depreciation and amortization, the CAGR was 16 percent.
Because the company had sales of under $1 billion last year, it will qualify as “an emerging growth” company and be exempt from some of the reporting requirements of other public companies.