Cult quilted-bag label Vera Bradley — your Jitney seat’s best accessory! — went public last week, spilling 11 million shares priced at $16 into the market, raising $178 million. However, demand was so high that the next day they released 1.65 million more shares, bringing the total shares to 12.65 million. In its first day of trading, the stock price skyrocketed 55.3 percent, and closed late Friday at $26.90. Analysts are surprised that a business based on discretionary spending can do so well in the current economic climate, and think the bag company might be a ray of hope for others.
Just last week, another women’s apparel retailer, Body Central Corp. (BODY), priced poorly and ended its first day of trading flat; it remained at that level at the close Thursday.
But the window could be edging wider for companies that experienced some growth during the economic downturn and offer affordable products to a broad segment of consumers.
The bags, for some reason, appeal to consumers of all ages: The nation’s eyes have become accustomed to seeing the product on everyone from tweens to yuppies to grandparents, all of whom have no problem spending $15 to $130 on a blanket sewn into a sack. And if times get tough again, they can just unstitch the bags and save on bedding and dish rags.
Vera Bradley, Bravo Brio IPOs Rise Despite Consumer Link [WSJ]
Vera Bradley sees strong demand for IPO [Bloomberg Businessweek]
