The Fresh Market launches an official listing for an IPO, which is the second time the company has gone public.
The parent company The Fresh Market Holdings Inc. has one S-1 registration statement for an IPO on July 16 with the Securities and Exchange Commission (SEC). That followed a Draft IPO registration statement filed March 12th, as well as several amended submissions.
The S-1 filing indicated that the number of common shares on offer and the price range have yet to be determined. The Fresh Market, based in Greensboro, NC, listed a placeholder bid amount of $ 100 million for the registration fee calculation. Its common stock would be listed on the Nasdaq Global Select Market Exchange under the symbol TFM.
“With this offering, we are returning to the public markets, which we believe gives us considerable flexibility in funding our strategy, including the ability to refinance a significant portion of our debt,” said Jason Potter, President and CEO of The Fresh Market in a letter to prospective shareholders that was included in the filing.
“Our core product range of high-quality fresh food, hard-to-find ingredients and specialties, local products and curated dishes are popular with our old and new guests. We believe The Fresh Market is able to capture the secular trend of consumer preference for higher quality, fresh food, ”said Potter (left). “Our stores are consistently recognized as exceptionally clean, and we have safety and hygiene committees in place to ensure that each store is following new improved protocols as part of the COVID-19 environment. As others in the industry have become more conventional, we have further differentiated our offerings in order to generate enthusiasm for the reputation of our brand. “
IPO specialist Renaissance Capital estimated that The Fresh Market could raise up to $ 250 million on its initial public offering. The retailer currently operates 159 stores in 22 states.
“The Fresh Market offers high-quality, fresh groceries and hard-to-find items in a small, intimate store with great customer service and exceptional cleanliness,” said Renaissance Capital of Greenwich, Conn Research note on the S-1 file. “The company has a supply chain and distribution partners that enable it to get groceries from farm to shelf in 14 days or less. It also has a dedicated team sourcing local products to set itself apart from traditional retailers. “
Fresh Market’s tentative IPO filing last March came almost five years to the day after the retailer announced its plans to sell privately.
New York-based Apollo Global Management and The Fresh Market announced on March 14, 2016 that the retailer agreed to acquire from a subsidiary of the private equity firm for $ 28.50 per share in cash, about $ 1.36 billion total. Fresh Market founder and chairman Ray Berry and his son Brett Berry, who together owned 9.8% of the chain’s outstanding shares, agreed to transfer the vast majority of their stakes in the Apollo deal. At the time, The Fresh Market operated 186 stores in 27 states, and the deal was closed in April 2016.
“As others in the industry have become more conventional, we have further differentiated our offerings to create excitement for our brand’s reputation.” – Jason Potter, CEO of Fresh Market
The Fresh Market was founded in 1982 and went public via a $ 290 million initial public offering in November 2010 when the company had 100 stores in 20 states.
In last week’s IPO filing, The Fresh Market reported that sales for fiscal 2020 (53 weeks ending January 31) rose 24% to nearly $ 1.89 billion from $ 1.52 billion in fiscal year 2019 (52 weeks to January 26, 2020), with the same store sales increasing by 22.3% compared to a decrease of 1.8% in the previous year. The bottom line rose from a net loss of $ 65.4 million in FY 2019 to a net income of $ 26.9 million in FY 2020.
For the 13-week first quarter of 2021, which ended May 2, sales of The Fresh Market rose 9.4% to $ 489.5 million from $ 447.2 million in the year-ago period. Sales in comparable stores rose by 7.3% compared to 12.9% in the previous year. Net income was $ 10.5 million compared to a net loss of $ 15.6 million in the first quarter of 2020.
In the IPO prospectus, The Fresh Market announced that it would grow through the attractiveness of its easy-to-buy small-box stores (21,000 square feet average) in major markets with strong buyer demographics, as well as its extensive fresh food business, which accounts for about 70% of the Make up sales. The latter includes the expansion of its Market Meal Kits, whose sales increased 45% in fiscal 2020, and a new ready-to-eat food concept called Kitchen Square.
“We assume that we will pilot this new concept in two to three branches in the 2021 financial year by redesigning the floor plans to enable a completely new restaurant look and feel,” says the brochure of The Fresh Market . “This becomes a convenient destination for guests who invite themselves to dinner, order in advance, and focus on the ‘grab and go’. An inviting atmosphere with inspiring offerings will change throughout the day from a morning coffee and a croissant to a made-to-order salad for lunch to a pizza and real Carolina BBQ for dinner. The aim is to offer our guests additional options in restaurant quality and to win over a younger target group for our business. “
The fresh market
After a break in the past three financial years, The Fresh Market is also planning new openings in order to concentrate on consolidating its core business. The short-term opportunities amount to around 75 locations with “high visibility, low risk” at infill locations and surrounding metropolitan areas in core markets such as Florida and the Carolinas, the grocer reported.
“These 75 locations offer an extensive pipeline for our short-term store openings and exceed the number of new openings planned for the next five years,” states the submission by The Fresh Market. “We believe we can expand beyond our core markets in the long term by increasing the penetration of our secondary markets and expanding our core regions. We plan to open a new store in the 2021 financial year and an average of around 10 new stores per year over the next four years. “
On the ecommerce side, The Fresh Market is already offering same day Instacart delivery in all stores, and the grocer is now looking to upgrade its online store and expand its roadside pickup.
“We are in the process of redesigning our e-commerce sales portal, a project that began in the second half of the 2020 financial year,” says the company’s prospectus. “We believe this program and the improvements to our roadside pickup experience with hand picking by our Personal Shopper Store team members have significantly increased our e-commerce sales. We believe roadside collection will be the growth driver in our digital business, where we can differentiate the experience through our expertise in high-touch guest service. “