Boot Barn Holdings Inc., which operates 155 stores in 24 states, has filed for an initial public offering. The company plans to raise up to $86.25 million.
The number of shares to be sold and the expected pricing werent yet revealed, according to a filing with the Securities & Exchange Commission.
Founded in 1978, Boot Barn focuses on western and work-related footwear, apparel and accessories. In December 2011, it was acquired by Freeman Spogli & Co., the private-equity firm. Since then, it has ramped up expansion, reaching 155 stores at the end of June, up from 86 stores as of the end of fiscal year 2012. The additions over that period reflected 14 new stores resulting from organic growth and 55 new stores from strategic acquisitions, including acquisitions of RCC Western Stores and Baskins. Seventy-eight of its stores at the close of June were located in Arizona, California and Texas.
It believes it has the potential to grow its store base to at least 400 domestic locations.
The company recorded 19 consecutive quarters of positive same store sales growth averaging 11.6 percent per quarter and same store sales growth of 6.7 percent in the 2014 fiscal year ended Mar. 29. Net sales increased to $345.9 million in 2014 from $168.7 million in 2012, representing a compound annual growth rate of 43.2 percent. In 2014, net income reached $5.7 million, rebounding from a loss of $5.3 million the prior year.
In the prospectus, Boot Barn said its the fastest-growing lifestyle retail chain devoted to western and work-related footwear, apparel and accessories in the U.S. and has over twice as many stores as its nearest direct competitor that sells primarily western and work wear. Its broad geographic footprint and size supports significant economies of scale.
Boot Barns stores, which are typically freestanding or located in strip centers, average 10,800 square feet and feature a broad assortment of approximately 200 brands and more than 1,500 styles on average. Core brands include Ariat, Dan Post, Justin, Levi Strauss, Lucchese, Miss Me, Montana Silversmiths, Resistol and Wrangler. Its exclusive private brands – including Shyanne, Cody James, American Worker and BB Ranch-accounted for 7 percent of sales in its last fiscal year.
Wrote Boot Barn in its prospectus, In fiscal 2014, the vast majority of our merchandise sales were at full price, which, we believe, demonstrates the strength of our brand and the less discretionary nature of our product offering.
Last year, men’s merchandise accounted for approximately 58 percent of it sales while western styles comprised approximately 68 percent. Boots accounted for nearly half of sales, with apparel comprising an 34 percent and the balance consisting of hats, gifts, accessories and home merchandise.
Boot Barns target demographic ranges from western and country enthusiasts to outdoor workers across fields. It positions itself as a one-stop shopping experience to meet their varied needs.
Our store environment, product offering and marketing materials represent the aesthetics of the true American West, country music and rugged, outdoor work, Boot Barn said in its prospectus. These threads are woven together in our motto, ‘Be True, which communicates the genuine and enduring spirit of the Boot Barn brand.
Among its other competitive strengths mentioned were its knowledgeable store associates, its B Rewarded loyalty program that has approximately 2.2 million members, and its versatile store model that works in store sizes and markets. Boot Barns sponsorship of western events-including 257 local community rodeos, 9 national rodeos and 89 other country and western events-also helps feed its authenticity with the western lifestyle.
Finally, a strength was seen as its experienced management team with an average of approximately 25 years of experience in their respective functional areas and a long tenure of our employees at all levels. For example, its district and regional managers have been with the retailer an average of eight years and store managers an average of over five years. James Conroy, its CEO since 2012, was formerly COO at Claire’s Stores, the tween accessories chain. Laurie Grijalva, its chief merchandising officer, first joined Boot Barn in 1993.
With significant investments in the past several years in personnel, information technology, warehouse infrastructure and an e-commerce platform, Boot Barn believes it can grow its store base in the U.S. by at least 10 percent annually for the next several years. Other growth opportunities are expected to stem from efforts to increase its brand awareness and customer loyalty, and expand its online and social media initiatives. As of Sept. 1, it had 2.1 million Facebook fans. E-commerce sales accounted for only 4.1 percent of revenues in fiscal 2014, but have grown at a 38.2 percent CAGR since launching a new e-commerce platform in fiscal 2010.
The company reported a profit of $1.4 million for the quarter ended June 28, versus a loss of $1.4 million a year earlier. Sales increased 28 percent to $82.5 million, according to the filing.
Proceeds from the offering will be used to repay a portion of its existing term loan facility, including applicable prepayment penalties and fees. Freeman Spogli & Co. will remain the controlling owner.
The company plans to list on the New York Stock Exchange under the symbol BOOT. The underwriters are J.P. Morgan, Wells Fargo, Piper Jaffray, Baird, and Jeffries.
