Revolve is ready for Wall Street.
The e-commerce company, which bills itself as “the next-generation fashion retailer for Millennial and Generation Z consumers,” set its initial public offering price at $16 to $18 a share, according to a regulatory filing Tuesday.
That sets the company to start trading Class A shares under the “RVLV” ticker symbol on the New York Stock Exchange following a road show for would-be investors.
At the midpoint of the expected price range, Revolve would be valued at $1.2 billion and the IPO would raise $230 million. About $43 million of that would go directly to the company, which plans to use $40.8 million to buy 2.4 million shares of its common stock from investors TSG and Capretto. (TSG is also selling 7.1 million shares in the offering, while Capretto is selling 392,928 shares).
Morgan Stanley and Credit Suisse will act as lead joint book-running managers for the offering.
In its IPO paperwork, Revolve said, “The principal purposes of this offering are to increase our financial flexibility, create a public market for our class A common stock and improve our brand awareness.”
After the offering, co-chief executive officers Michael Karanikolas and Michael Mente will continue to control two-thirds of the company’s voting rights by virtue of their class B shares.
Revolve filed for the offering confidentially and, when WWD reported that its big public reveal was pending in September, the market was at a high and Farfetch’s hotly anticipated introduction was around the corner.
Farfetch made it through the window, but Revolve did not as worries, particularly on China and luxury, sunk the market.
But now, the IPO machine is back in full swing. Levi Strauss & Co. staged a strong offering in March and VF Corp. successfully spun off its jeans business, Kontoor, last week.
Founded in 2003, the company is still very much in growth mode.
Sales last year grew 24.8 percent to $498.7 million as profits increased more than fivefold to $30.7 million.
Revolve’s approach to keep that growth up is tied closely to influencers and is very data-heavy, making it something of a buzzy business model for investors.
“To improve on the merchandise offerings from traditional retail, we have built a custom, proprietary technology platform to manage nearly all aspects of our business, with a particular focus on developing sophisticated and highly automated inventory management, pricing and trend-forecasting algorithms,” the company said in its filing. “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. We have complemented these efforts with an organization built from the ground-up to make decisions in a data-first, customer-centric way.”