Burlington Coat Factory posted record numbers after raising $227 million in its first initial public offering.
"It's the perfect time for Bain and Burlington to do an IPO," Burt Flickinger, managing director at consumer industry consulting firm Strategic Resource Group told Bloomberg Businessweek. "Retail is still turning the wrong way, but off-price retail is the only area that's turning the right way, and Burlington can participate in that."
Burlington's stock rose 44 percent and was being traded at $24.10 late Wednesday morning in New York.
"We have been working really hard on transforming the company," Thomas Kingsbury, chief executive officer of Burlington, told Bloomberg Businessweek in a phone interview. "We have put a lot of things in place like changing the look of our stores and being more of an off-price retailer than we were back in 2008."
The retailer sold 13.3 million shares for $17 each after offering the stock for $14 to $16 each. The company announced a loss of $30.6 million in the last six months on Aug. 3. This is a difference of $5.2 million from the previous when the company netted a loss of $35.2 million Bloomberg Businessweek reported.
Between 2004 and 2007, Bain Capital, a leading private, alternative asset management firm bought four retailers in Burlington, Toys "R" Us Inc., Michaels Stores Inc, and Guitar Center in transactions worth $17 billion.
Burlington's enterprise value is currently $2.71 billion according to terms in the company's original IPO filing Bloomberg Businessweek reported. The number is an increase compared to the $2.1 billion Bain Capital initially purchased the company for in April 2006.
As part of deal, Burlington also has proceeds which it will use to obtain $170.6 million in bonds. Bain is then expected to own 76 percent of Burlington before the deal's "overallotment option" is used. Burlington offers apparel, accessories, home goods, and coats for up to 70 percent off department store prices.
