After pricing at $18, $1 higher than its anticipated $15-$17 range, Tumi popped over 50% to $27 in the first minutes of initial trades.
Based on the higher IPO price, Tumi will raise nearly $340 million valuing the company at $1.2 billion. The luxury travel goods maker intends to repurchase the ownership stake held by British PE-firm Doughty Hanson with most the proceeds.
PrivCo Revenue Projections for Tumi:
Known for its iconic black nylon travel bags averaging around $900 in price, Tumi’s revenue increased 30.5% in 2011 to $330 million. PrivCo expects sustained growth in Tumi as the premium brand opens Tumi stores and expands its accessories line to the tune of $398 million revenues for 2012.
Tumi’s success is in-line with increased consumer appetite for established non-internet retail brand IPOs, such as those of Michael Kors, Prada, and Annie’s Foods, all of which had very successful public offerings.
Tumi’s successful debut also highlights retail IPOs’ outperformance of recent marquee internet and tech IPOs such as Groupon, Zynga, and Pandora. These buzzy tech names have generated the headlines but failed to deliver the earnings of their more established retail counterparts.
PrivCo believes this successful retail wave is paving the way for a strong consumer branded IPO year in 2012, with internet names taking a smaller role in this year’s IPO class (with the notable exception of Facebook). With successful, tested, and understandable business models and expansion opportunities in Asia, investor appetite for retail IPOs has clearly grown over the last year making the time right for Fender Guitar, Michael’s Stores, and Guitar Centers to go public this year at high valuations.
"As Tumi's strong IPO performance shows, 2012 will be the year of the branded retail IPO, broadening the IPO market past the largely unprofitable consumer Internet names that dominated 2011's IPO class," concludes PrivCo CEO Sam Hamadeh.
RELATED NEWS: SPLUNK IPO DEBUTS MINUTES AGO WITH +90% POP:
In related IPO news, business-to-business software provider Splunk opened for trading at 11:20am today and immediately popped to $33 in its first minutes, nearly double its $17 IPO price, which was above its expected $11-$13 range. PrivCo 2012 revenue estimates for Splunk are $205 million, nearly 70% above 2011.