Five Below, a pre-teen to teen-focused retailer that offers all of its products at $5 or below, filed on Wednesday with the SEC to raise up to $150 million in an initial public offering. Acquired by Advent International for $193 million in October 2010, the company offers an assortment of apparel, accessories, crafts and candy. Since being founded in 2002 by David Schlessinger and Thomas Velios, it has expanded to 192 locations in 16 states, and it plans to open an additional 50 stores in 2012.
Sales for the twelve months ended 1/28/12 rose 51% to $297 million. Gross margin improved 175 basis points to 33%, and operating margin increased by 280 basis points to 9%. Net income for the year was $16 million. Comparable stores sales growth was 8%, as the net sales per store increased to $1.7 million.
Schlessinger, the Executive Chairman, previously founded Zany Brainy, children's retailer, in 1991 and Encore Books, a book retailer, in 1973 (at age 18). Zany Brainy was acquired out of bankruptcy for $115 million in August 2001 and shut down in 2003. Encore Books was sold to Rite Aid in 1984 before closing in 1999 under the ownership of Lauriat's.
Five Below plans to list on the NASDAQ under a symbol to be announced. Goldman Sachs, Barclays, Jefferies, Credit Suisse, Deutsche Bank, UBS and Wells Fargo are the joint bookrunners on the deal.
The six retail IPOs in 2011 performed very well, with an average first day return of 25% and an average return to-date of 45%.
