NEW YORK — As DTLR Holding Inc. heads to Wall Street, market experts are bullish about the urban retailer’s prospects as a public company.
The Hanover, Md.-based parent company of the DTLR athletic chain filed for an initial public offering earlier this month. According to its filing with the Securities & Exchange Commission, the firm plans to sell up to $75 million worth of stock. The retailer declined to comment.
SportsOneSource analyst Matt Powell said a public offering could help the retailer, which operates 92 stores in 12 states, the District of Columbia and online.
“This will give them the capital to expand very quickly at a time when the urban retail business is probably as good as it’s been in a decade,” Powell said.
However, there may be some challenges ahead, the analyst added. Aside from the quarterly demands of Wall Street, DTLR will have to adapt to being in the spotlight.
“Urban retailers have always been pretty secretive and they haven’t shared a lot of their data,” Powell said. “As a public company, you’re much more exposed, and I’ve got to believe all the other regional players in the states [where they operate] are dying to see the documents they file about the details of the business.”
Investment firms Robert W. Baird & Co. and Piper Jaffray are the lead underwriters for the stock offering. DTLR’s filing reported that the retailer’s net sales were $181.4 million for the fiscal year ended Feb. 2, up from $145.2 million in 2011.
Footwear comprised 75 percent of sales. The company also stated plans to open 10 to 12 new stores in 2014.
“It’s great for DTLR that they’ve grown enough that investors recognize that,” said V.J. Mayor, director of communications and research for the Sports & Fitness Industry Association. “Something must be working in their business model if they’re willing to go out for this public offering.”
Marshal Cohen, chief industry analyst for The NPD Group Inc., said specializing in the sports and lifestyle market will be an advantage for DTLR as it begins the process of going public.
“When you look at how different categories in the industry have performed over the past two years, one of the areas of great growth opportunity is athletic footwear,” he said.
The analyst added that it’s also possible the company could begin trading very soon.
“From the filing to the actual delivery, some businesses can take six months, others can happen pretty quickly,” Cohen said. “It really depends on what their plan of attack is, but I wouldn’t be surprised if they get it done within six weeks.”