The wave of IPOs hitting Wall Street is bringing some new — and acquisitive — names to the fore and into the rough and tumble.
Witness the Jill Ramsey-led A.k.a. Brands, which staged its initial public offering on Wednesday, raising some $110 million by selling 10 million shares at $11 each, with a good deal of the funds earmarked for debt repayment.
More from WWD
After fears surrounding the Chinese real estate debts rattled markets earlier in the week, Wall Street was bouncing back on Wednesday. But investors still took a cautious stance toward the newcomer. Shares of A.k.a. fell 4.2 percent to $10.54 once they started trading.
That still left A.k.a. with a market capitalization of $1.3 billion and a turn in the spotlight, which can be especially glaring on Wall Street.
While many of the companies coming to market are the oft-sited digital darlings such as Warby Parker and Allbirds, A.k.a. is playing into many of the same direct-to-consumer and young consumer trends in the market, but with a different spin on the business model.
Ramsey — a digital retail veteran whose background includes stints at Walmart, eBay and Macy’s and is chief executive officer of A.k.a. — is looking to buy brands that have proven they can connect with consumers and then help them grow with a little business savvy.
It’s an approach that’s been used before in the private equity world, but A.k.a. is something of a breakout having now gone public with a 10-figure valuation, giving it a platform and more resources and a higher profile to wheel and deal.
Ramsey took the helm of the Summit Partners-backed company just after the pandemic started and hit the ground running despite all the consumer disruption. She changed the name of the firm to A.k.a. from Excelerate Brands. And the portfolio, which already included Princess Polly, Petal & Pup and Rebdolls, started to grow this year with the addition of streetwear company Culture Kings. (Prince Polly, Petal & Pup and Culture Kings are all based in Australia, while plus-size specialist Rebdolls is headquartered in New Jersey).
The brands are all relatively young — Culture Kings is the oldest, founded in 2008 — and good at drawing attention online.
All together they drove A.k.a.’s pro-forma sales up 76 percent to $385 million last year, with 80 percent of those sales at full price and returns a relatively low 11 percent. Pro-forma profits tallied $13.8 million.
A.k.a.’s brands operate independently, but have access to a common platform.
“This model balances scale-enabled cost savings with operational flexibility, facilitates low-risk innovation and accommodates the needs of our brands at various stages of growth,” the company said in its registration statement for the offering. “Our platform is designed to provide collective advantages and accelerate profitable growth in both existing and new markets and allows us to manage the brands at a portfolio level.”
Key to this is an asset-light philosophy that makes use of third-party platforms across sourcing, distribution, technology and other back-office functions.
“Our flexible and asset-light approach to technology allows us to stay at the forefront of innovation in order to better serve our customers and enhance profitability,” the company said.
It’s a plug and play approach that will have Ramsey and her team scouting for new names to bring on board.
“Acquiring new brands is core to our strategy and an important driver of our future growth,” A.k.a. said. “We seek brands that diversify our portfolio through new demographics, markets or fashion tastes, which allows us to grow without cannibalizing our current brands. We seek direct-to-consumer brands with strong customer followings and a proven track record of operating profitably but need help scaling to further accelerate their growth.”
More from WWD: