Revolve is ready for the klieg lights of Wall Street.
The Millennial-focused e-commerce site quietly revealed its registration statement for an initial public offering, confirming a Sept. 14 report in WWD that the company had secretly filed for an IPO under the Jobs Act and was ready for its big reveal.
The company filed under the corporate name Advance Holdings, but will convert its name to Revolve Group Inc. Its Class A shares will trade under the symbol RVLV on the New York Stock Exchange. The company will have Class B shares with 10 times the voting rights.
Revolve comes to the market at a good time. The stock market is trading at record highs and Farfetch whetted the investor’s appetite for stocks at the intersection of fashion and tech, going public just over a week ago and scoring an $8 billion valuation. (Farfetch stock closed down 4.8 percent to $25.92 Monday, making for at 30.2 percent increase since its debut).
The Revolve IPO process pulls back the curtain at the company, which has successfully navigated the influencer world, drawing attention and sales dollars away from traditional brick-and-mortar retailers.
Revolve described itself in its filing as “the next-generation fashion retailer for Millennial consumers”
Last year, the firm counted 7.3 million unique visitors per month with an average order value of $304. Sales grew 28 percent to $399.6 million while net income expanded to $5.3 million from $2.4 million and adjusted earnings before interest, taxes, deprecation and amortization tripled to $28.4 million.
Revolve boasted that 75 percent of its sales last year were conducted at full price.
In addition to selling outside brands, Revolve has built a portfolio of 19 of its own brands that are an important part of its business.
For the 12 months ended June 30, the company said its own brands “represented eight out of our top 10 brands, 27 percent of the Revolve segment’s net sales, and three out of the top five brand-search terms on external search engines that led to a purchase.”
Founded in 2003 by co-chief executive officers Michael Mente and Mike Karanikolas, the company prides itself on its techie approach, which should appeal to an investor base that is largely looking past traditional retailers and wanting to jump into companies with fashion approaches that have proven to work.
“Our proprietary technology leverages data from a vast net of hundreds of thousands of styles, up to 60 attributes per style, and millions of customer interactions, creating a strategic asset of hundreds of millions of data points,” the company said. “We have complemented these efforts with an organization built from the ground-up to make decisions in a data-first, customer centric way.
“Together, this enables a ‘read and react’ merchandise approach; we make shallow initial buys, then use our proprietary technology to identify and reorder strong sellers, turning the fashion cycle from a predictive art to a data-driven science,” the firm said.
This allows for a steady flow of newness, with 1,000 new styles launching on the site per week.
The company also outlined several avenues for avenues for growth, including a bigger push into luxury and beauty, more goods at lower price points, men’s and “targeted acquisitions.”
Many of the specifics of the IPO were not included in the initial registration statement, although the amount set to be raised in the offering was pegged at $100 million for starters.
Private equity firm TSG Consumer Partners took a minority stake in Revolve in early 2014 and now has the opportunity to exit that position. TSG has been helping Revolve develop its business since at least late 2012, when the two reached a “management” agreement which saw TSG receive “an advisory fee of $300,000 per calendar year” as well as out of pocket expenses. The agreement will be terminated when Revolve goes public, but will yield one more $300,000 fee for TSG as it ends.