The string of active lifestyle industry IPOs continued this week as Perfect Moment, a London-based luxury lifestyle brand focused on ski apparel and other activewear, ended up pricing its initial public offering at just $6 a share on the NYSE American exchange. The initial range floated by the company was for an offering in the $6 to $7 range so getting to the low end of the range was better than the last IPO in the active lifestyle market.
With 15.2 million shares outstanding once the deal closes, the company would have a valuation of $91.2 million.
But not so fast, Scooby Doo. It turns out the market did not have an appetite, at least initially for a luxury ski brand backed by Nick Jonas, of Jonas Brother fame, and his wife, actress Priyanka Chopra. It appears the two do not have the same draw with high-end ski consumers that Taylor Swift has with NFL-licensed products.
PMNT shares, which would be a better ticker symbol for a Buy Now, Pay Later company than an active apparel company, fell throughout the day after Thursday’s debut, closed down 13.3 percent to $5.20 at the close.
The company, originally founded in Chamonix, France, is now backed by the beautiful people but it wasn’t enough to drive energy on the first day of trading as the company raised approximately $8 million, before deducting underwriting discounts and offering expenses, selling 1,334,000 shares of its common stock, 100,000 more shares than initially planned.
Perfect Moment has granted the underwriters a 45-day option to purchase up to an additional 200,100 shares of common stock to cover over-allotments, if any, at the public offering price, less the underwriting discount.
The company said it intends to use the proceeds for general corporate purposes, including working capital, sales and marketing activities and general and administrative matters.
The company, which is apparently running on an April through March fiscal year, reported in its most recent S-1/A filing with the SEC that sales for the six-month H1 period through September 30, 2023 (H1 Period) more than doubled to $6.9 million and e-commerce revenue jumped 40.0 percent to $2.1 million. For the math and finance folks in the back of the room that leaves growth of over 165 percent in the wholesale business to $4.8 million for the H1 Period.
The last full-year reported was for the 12 months ended March 31, 2023, which had sales of $24.4 million for the period.
Margins for the H1 Period were said to be approximately 40 percent of sales, up considerably from the 27 percent margins in the prior-year corresponding period.
Operating loss was approximately $3.0 million for the H1 Period, better than the $8.3 million loss in the prior-year period.
The company had a loss of $4.2 million in the H1 Period, an improvement from the $11.1 million net loss posted in the prior-year period.
However, some have noted that the company’s IPO filing documents contain certain “going-concern” language, which one might expect as boilerplate “risks” language, But this particular item calls out the risk associated with a $44.4 million accumulated net loss the company had amassed by the end of the reported period. A shareholders’ deficit of $5.8 million was also called out in the S-1/A.
One analyst wrote, “While that language could be expected in the paperwork from a biotech that has yet to have a product approved, it’s less common for a consumer company.”
To mitigate the effect of some of the issues stated, the company added explanatory language in the prospectus and also found the right story to tell.
The prospectus reads: “Management’s plans to alleviate the conditions that raise substantial doubt include pursuing this offering and exploring sources of long-term funding in the private markets, taking out short-term loans and debt factoring to assist with working capital shortfalls, closely monitoring the collection of debt, and putting other strategies and plans in place to deliver positive EBITDA in the next fiscal year.”
They will have to see if this one flies high or gets buried in a snow drift. The offering is expected to close on February 12, 2024, subject to customary closing conditions.
The idea for the Perfect Moment brand was reportedly born in Chamonix in 1984, when the professional skier and extreme sports filmmaker, Thierry Donard, began making apparel for his team of free-ride skiers and surfers. Donard used his experience to create designs that were characterized by quality, style and performance to enable his athletes to achieve their perfect ski run or perfect wave ride: that “perfect moment.”
In 2016, the company also began to offer swimwear and activewear. Without the presence of a physical retail store, Perfect Moment’s collections were sold directly to customers through e-commerce as well as through wholesale to retailers. Perfect Moment said it plans to expand by opening directly operated stores in strategically selected major cities and pop-up stores in ski resorts.
ThinkEquity and Laidlaw & Company (UK) Ltd. are acting as joint book-running managers for the offering.
Images courtesy Perfect Moment
