STP - Step One Clothing

[Dona Ferentes]

Step One Clothing Limited (STP) commences trading on the ASX

Highlights:

• Trading in shares of Step One commences on the ASX today at 11.00 AEDT following a successful IPO to raise $81.3 million at $1.53 a share
• Primary capital raise to support future growth including international expansion
• Brand owner and digitally native direct-to-consumer retailer, focused on innovative, high quality, organic, ethically produced, and sustainable innerwear
• Founder-led business with highly scalable model and strong growth track record

Step One Clothing Limited, a leading online, direct to consumer, innerwear brand, will commence trading on the Australian Securities Exchange (ASX) today at 11.00 AEDT under the ASX Ticker STP. The listing follows a successful fully underwritten initial public offering, raising $81.3 million at $1.53 per share. Primary funds raised will be used to support the Company’s growth strategies, including growing Step One’s existing customer base in Australia and the UK, and investing in establishing a presence in the US.

Founded in 2017, Step One is focused on high quality, organic, ethically produced, and sustainable products in the innerwear category. Company growth strategy is focused around three pillars: strengthening brand equity, product development to specialise in the innerwear market, and continued international expansion. This growth strategy will come to fruition through the recent expansion into the US, and the broadening of its product range into the sports and womens underwear market.

Step One operates within a large global industry with the potential to capture further market share globally. Research by Frost & Sullivan reveals the global underwear market is worth approximately $150 billion and growing, with a clear trend towards increasing online sales, linked to increased adoption of mobile technology, and 24/7 convenience.

Founder and CEO Greg Taylor said an IPO reflects the best option to provide the funding needed to support Step One’s next stage of growth, and its vision of becoming an innovative and ethical global brand:

I am very excited that today Step One has listed on the ASX. I created Step One to solve the problems of chafing, ride up and managing sweat. In addition to creating an innovative product, it is also made from organic and sustainable materials. I am looking forward to continuing to build the Step One brand as we expand offshore

I am pleased with our year to date sales performance in the lead up to the November Black Friday Cyber Monday sales event. I am also pleased to confirm our US launch commenced as planned during October. Sales are being fulfilled from a third party logistics provider in the USA and initial results are consistent with our expectations.

...... and on Day One of listing, STP opened strongly, at $2.70 , traded down to $2.42 and now $2.64

 

[KevinBB]

There is too much hype about this one for my liking. Spamming the television with advertisements. Costs must be enormous.

I'm staying out until it has a good, profitable, history. Let my system buy it when the time comes.

KH

 

[sanketkarkare]

I am tempted to buy this one as a sector play. online underwear purchase is something that should only become popular in coming months/years. Don't see too much of a downside risk with step one. Any thoughts?

 

[frugal.rock]

Any thoughts?

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[galumay]

Don't see too much of a downside risk with step one. Any thoughts?

Well the first downside risk that occurs to me is total and permanent loss of capital. So I would want to understand the financials to try to quantify that risk. If its a profitable business with sufficient strength on the balance sheet then the next question is whether it can scale into an international market. Prior to listing it was a very small private business, so there needs to be a lot of high level execution to translate that into a successful public company expanding into offshore markets.

Personally I think I would wait and see if the business de-risks as it executes. I am always wary of investing too early in new businesses. There are a few years of Annual Reports for the private company available, so it possible to work out what the business operations looked like from a financial perspective. The hard part is trying to think about what the revenue, costs, margins etc look like as the business tries to grow offshore and how aligned the management is with shareholder interests.

 

[frugal.rock]

 

[Dona Ferentes]

ouch. price elasticity. Snap.

Step One now expects sales revenue growth to be 15-20%, compared to previous guidance of 21-25%. Expected proforma EBITDA is revised to $7.0-$8.5m from $15m.

 

[frugal.rock]

Even my quant pole won't have me into this.