Tilly's Files IPO
Tilly’s, the Irvine, Calif.–based surf and skate juniors retailer, filed for an initial public offering on July 1.
The company hopes to raise $100 million with the IPO, according to documents it filed with the Securities & Exchange Commission. It plans to be listed under the symbol TLYS. Goldman Sachs & Co., Bank of America, Merrill Lynch and Piper Jaffray were the lead underwriters of the deal.
With new funding, Tilly’s will go on a growth spurt. It runs 126 stores, and it will open 13 stores by the end of this year and 20 stores in 2012. The company’s store fleet has the potential to grow to up to 500 locations, according to the filing.
The retailer saw sales of $332.6 million last year, which was up 17.6 percent from a year earlier, according to the filing.
Tilly’s had reported sales of $332.6 million in 2010. The company debuted in 1982 and was directed by longtime chief executive Hezy Shaked, who stepped down in February. Daniel Greisemer was hired in February to be president and chief executive for the retailer. Before directing Tilly’s, he led women’s retailer Coldwater Creek Inc. Shaked remained as the retailer’s chief strategy officer and also stayed on as chairman of the board.
Tilly’s offers surf and skate brands such as Billabong, Quiksilver, O’Neill, Alpine Stars, Volcom, Fox Racing and Hurley.
Tilly’s IPO announcement comes at a time of consolidation for surf and skate retailers. Over the past 10 years, hundreds of core surf and skate shops across America went out of business. In a recent financial document, Pacific Sunwear, the leading mall retailer for activewear, noted that 400 of its leases were up for renewal through 2013, and the Anaheim, Calif.–based retailer reported it would let some of them expire.
While many manufacturers have applauded Tilly’s IPO because it means the retailer will buy more goods for its growing fleet of stores, there also is the question of how many stores the surf and skate market can sustain, said Duke Edukas, co-owner of Surfside Sports in Costa Mesa, Calif., and the West Coast chairman of the Board Retailers Association.
“Any company that can grow as many doors as they have in the past few years, hats off,” Edukas said. “But I don’t know how they intend to grow. [The market] is so saturated now. There are a lot of retailers going out of business. Tilly’s may be trying to recapture business once the economy comes back.”—Andrew Asch
