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Attention: IPO Financing Boom Of Fashion Industry: Which Companies Will Be Favored

2021/12/13 15:49:00 0

Although the global environment is still full of variables this year, the capital market has always maintained a high degree of activity. Especially in the big fashion industry, many young companies which step on the consumption hot spots in the product concept have been sought after by the capital, so they have obtained a large amount of financing and become a dark horse in the market. In these IPO cases, the law of which companies and what companies will be favored by capital also emerges.

The repeated changes of global epidemic situation and the market panic caused by Omicron, a new variant of the virus, make the global economy always face chaos and uncertainty of development prospects.

But even so, the global capital markets remain extremely active in 2021, which is coming to an end. The upsurge of IPO in the big fashion industry makes consumers and the market realize that even if the shadow of risk lingers, the optimism of the market, the consumption stimulus plans of governments and the "retaliatory" consumption of consumers still make a large number of young innovative and new brands and new enterprises.

In September, the Swiss sports shoe brand on onrun officially went to the U.S. market 　

According to stock analysis So far this year, the number of companies going to the U.S. for the first time has increased by 237% to 970, breaking the record of 480 IPOs set last year, according to com.

Although these "young faces" favored by capital are not all of the same type of brand enterprises, we can still see some common characteristics from them - they pay attention to sustainable development, pay attention to online e-commerce channels and have innovation consciousness of the senior management team. In terms of brand culture and product concept, they are in line with the future development direction of the industry.

Health concept is popular

It is undeniable that the epidemic makes people realize the importance of safety and health. From different consumption areas, such as cosmetics, skin care, clothing, travel and so on, we can see the consumption hot trend under the guidance of health concept and fitness consciousness.

In many IPO transactions this year, the sports shoe giant on holding is the brand representative sought after by investment institutions because of its focus on fitness concept.

Founded in 2011, the Swiss sports shoe brand on onrun focuses on running and has opened nearly 8100 stores in 50 countries. On onrun is growing rapidly in China, with net sales of CHF 8 million in the first half of this year.

On run

On September 15, on run officially landed on the NYSE with an opening price of $35.4, up 47.50% from the offering price. According to the prospectus, on Ondo's net losses in 2019 and 2020 were 1.473 million Swiss francs and 27.524 million Swiss francs, respectively. In the first half of 2021, on on run turned from deficit to profit, recording a net profit of CHF 379000.

At the same time, on onrun also told investors after its listing: "we will continue to take cautious and courageous measures in exploring unknown areas, whether it is for new areas, new products, new materials, new business models or new consumers. We also plan to continue to vigorously enter the field of running, which has been dominated by giants including Nike.

Sustainable development is the future direction

Sustainable fashion has been discussed and practiced for many years. Through the spontaneous upgrading and transformation of the whole business model and industrial chain, as well as the cooperation between different government organizations and scientific research institutions, "sustainable fashion" has become a hot IP topic in the fashion industry. The continuous attention of the society to this topic is an irresistible global trend.

This year, there are not a few brands carrying out IPO under the concept of sustainable development. In addition to showing investors more practical goals and plans, they also show the outside world their innovations in products, design and even at the retail level.

For example, Allbirds started its initial registration application with a "sustainable public equity offering framework" and a very strong statement: "The idea of 'creating better things in a better way' applies not only to our products, but to everything. We hope to apply the same spirit to our IPO, which will make us a sustainable public company." Allbirds wrote in its prospectus.

Allbirds

But then allbirds changed its wording in part and added a disclaimer, "The framework of principles and objectives for sustainable development, or spo framework, is a new, untested framework that has not been independently developed by an unselfish third party, but by a third party, including input from allbirds and other partners," it said

Younger executives

Nowadays, with the rise of the young generation of consumers, the youth revolution of fashion luxury industry seems to spread to the brand itself from the consumption level.

A group of younger executives under the age of 40 or at the middle level are stepping into the power center of the industry, replacing those who have been struggling to make progress. With more active, more radical and more flexible management methods and development thinking, a group of young executives under 40 years old or at the intermediate level are injecting strong development momentum into the brands they work for. In fact, this trend of "fashion executives getting younger" is also the general trend. In order to seize the increasingly fast changing market, brands need to have a central nervous system that can respond quickly and "understand" the new generation of consumers, and the younger management can achieve this goal.

These young entrants did not give up too much control. They introduced public investors and used a dual equity system to ensure that voting rights were strictly controlled. At the same time, the phenomenon of double executives in one position is becoming more and more common.

For example, Neil Blumenthal and Dave Gilboa, WarBy Parker's co chief executives, jointly retain 48% of the voting rights in shares, while Jennifer Hyman, chief executive of rent the runway, holds 40.1% of the voting rights of the company. In addition, Joseph Zwillinger and Timothy brown, both 40 years old, are co chief executives and directors of allbirds.

Joseph Zwillinger and Timothy Brown

Taken together, these brand companies use the same formula to sell themselves to the capital market. From advocating that they are oriented to millennials and generation Z, to focusing on sustainable development goals, to paying attention to digital marketing, diversified layout, and directly facing consumers, all these are in line with the characteristics of the future development trend of the current market and help them easily win the trust of the market and investors.