J.Jill IPO doesn't get any fashionable among investors

J.Jill return to the trading floors after 11 years of being privately held didn’t get investors excited enough. The fashion retailer’s initial public offering of shares (IPO) got indeed a lukewarm welcome as shares traded behind its lowest estimated range.

Coming back to the New York Stock Exchange on Thursday after 11 years as a private company was apparently not enough to attract the attention of investors, dragging the ladies fashion chain’s shares down 1.9 percent to a 12.75 dollars apiece close that fell short of the initial estimated price range of 14 to16 dollars per share.

J.Jill raised 152 million dollars (100 percent insider) by offering 11.7 million shares at 13 dollars apiece. J.Jill plans to list on the NYSE under the symbol JILL. BofA Merrill Lynch, Morgan Stanley, Jefferies, Deutsche Bank, RBC Capital Markets, UBS Investment Bank and Wells Fargo Securities acted as lead managers on the deal.

J. Jill (NYSE:JILL) confidentially filed for IPO in late 2016, made its S-1 filing public on February 10 with a 100 million dollars offering placeholder, to file an amended S-1/A not even two weeks later with an amended proposed maximum offering of 215 million dollars with a share price cover range of 14-16 dollars per share, recalled ‘Seeking Alpha’.

Lukewarm welcome to J.Jill’s Wall Street comeback

It’s worth recalling that the specialised clothing chain is the first fashion retailer to go public since 2015, according to Bloomberg. Commenting the IPO for ‘Fortune’, “The apparel sector and retail in general is soft,” said Neil Saunders, managing director of retail at GlobalData, a New York consulting firm. “This has likely diminished interest among [J.Jill] investors.”

J. Jill first went public in 1993 and was acquired by Talbots for 517 million dollars in 2006. Barely three years later it changed hands again, landing at private-equity firm Golden Gate Capital’s portfolio for 75 million dollars. In 2015, another investment firm, TowerBrook, bought J.Jill for a 400 million dollars.

J.Jill sold 11.7 million shares in the offering, with the proceeds going to TowerBrook. Its market value after a day of trading was 553 million dollars, as per data quoted by Bloomberg.

The company’s CEO, Paula Bennet, said to ‘The Street’ that "Because we have been delivering tremendous profitable growth and we have great momentum in terms of building the size and value of our customer file and we have great momentum in our e-commerce business. So, we're confident that we've got the strategies in place to continue to grow very profitably."

J.Jill’s FY16 revenue came in at 617 million dollars for the fiscal year ended October, 29, a 10 percent increase from the 432 million dollars generated in 2012. Bennet highlighted the growing weight of online for the company, saying that 38 percent of its business is done through e-commerce.

Photo:J.Jill Web