<\/p>\n
\n\tBusiness is more of a daredevil act than ever \u2014 but the most death-defying leap might just be into the IPO market.<\/p>\n
\n\tThe pandemic, inflation, war, a jumble of political discontent, tariffs and the rise of AI have conspired to make everything strange or just impossible to understand. And that goes double for fashion, which also has to contend with the frazzled consumer.<\/p>\n
\n\tWhile the chief executive officers of the fashion industry\u2019s already public companies have been able to \u201ccontrol the controllables\u201d and power through, brands eyeing an IPO are forced to meet the confused world head-on, even as it sinks into their own valuations.<\/p>\n
\n\tA window for new IPOs, even fashion offerings, opened this summer. SpaceX was the biggest player to jump, but others made it through.<\/p>\n
\n\tReformation Inc. made its debut in July, but has seen its stock sink. Menswear giant Tailored Brands filed for an offering, but hasn\u2019t taken the leap yet.<\/p>\n
\n\tAnd in the wings are a host of other brands that have been winning in the private market and are seen as contenders, including Alo, Vuori and Skims (which has long been talked about as a potentially strong IPO, but never actually made the jump). Jamie Salter\u2019s Authentic Brands Group has signaled its intent for an offering in the short term.<\/p>\n
\n\tIPOs \u2014 when a company or its investors sell shares on the open market \u2014 can pump up or deflate fashion egos as the investing public at large weighs brand, financial results, management, strategy and market landscape and boils it all down into a single stock price.<\/p>\n
\n\tWhen public companies don\u2019t like their stock prices, they\u2019re stuck. Before an offering, one can still walk away.<\/p>\n
\n\tSmart ring maker Oura Inc. was eyeing a roughly $15 billion valuation, but this week pulled the offering citing \u201cuncertainty in the IPO market.\u201d Last week, away from fashion, MGU Bamboo Insurance Services and metal powders producer Amaero postponed their IPOs.<\/p>\n
\n\t\u201cThere\u2019s a high level of uncertainty in the marketplace from a macro standpoint,\u201d said Michael Prendergast, managing director in Alvarez & Marsal\u2019s consumer and retail group. \u201cWe\u2019ve got two wars that we\u2019re actively engaged in. You can\u2019t turn the television on and not hear at least 15 to 20 minutes of someone droning on about AI. Then the fashion sector has always had a very fickle relationship with IPOs and with Wall Street.<\/p>\n
\n\t\u201cReformation, that should be great and it\u2019s just kind of lagging along and you\u2019re scratching your head,\u201d he said.<\/p>\n
\n\tShares of the sustainably minded brand Reformation were priced at $15 when it went public, the low end of its projected range, and have since fizzled to under $13.<\/p>\n
\n\tThe market overall is still near its high, but who knows where the future leads?<\/p>\n
\n\tThat\u2019s an uncertainty that both public and private companies have to deal with, but it\u2019s a problem that becomes most pressing while moving from one world into the other.<\/p>\n
\n\t\u201cThere is a quiet discussion of, now that tariffs have kind of leveled out, what does that mean for next year?\u201d Prendergast said. \u201cA lot of brands raised their prices. They then were the benefits of inflation being passed on to their customers, which resulted in higher comps. They did that with lower inventory bases as well.<\/p>\n
\n\t\u201cThat was a nice bump this year,\u201d he said. \u201cThe other thing is you won\u2019t have the tariff refund benefit next year. In the short term \u2014 and IPOs are all about short term \u2014 the uncertainty is outweighing the conviction of the markets.\u201d<\/p>\n
\n\tWhether a window opens for Authentic or Alo or Vuori or Skims remains to be seen, even as the businesses stand out over their peers.<\/p>\n
\n\t\u201cAre those companies different? Absolutely. Should Alo be wildly successful? One hundred percent,\u201d Prendergast said. \u201cThe story is yet to be told of whether the investors reward them or not \u2014 and how long it takes.<\/p>\n
\n\t\u201cThe companies that I\u2019ve seen with a successful run, it\u2019s all about them having the fortitude, the conviction to do what\u2019s right for their brand and their business,\u201d he said.<\/p>\n
\n\tSo the world\u2019s going to do what it\u2019s going to do, but brands and CEOs and everyone else can still decide how they want to move through that world.<\/p>\n
\n\tThe Bottom Line is a business analysis column written by Evan Clark, deputy managing editor, who has covered the fashion industry since 2000.<\/p>\n
#Fashion #IPOs #Face #Uncertainty #Market #Worries<\/p>\n","protected":false},"excerpt":{"rendered":"
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