Dive Brief:
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Investors quickly scooped up shares of Ollie’s Bargain Outlets at its initial public offering Thursday, raising its opening share price 42%.
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The warehouse- style, pure-play brick-and-mortar retailer operates 181 stores on the East Coast with total annual sales of $638 million and net income of $26.9 million. Q1 sales rose 20.9% to $162.5 million while same-store sales rose 8.8%.
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The retailer, founded in 1982, has expanded greatly in recent years, adding 23 stores in 2013, 22 in 2014, and plans another 25 to 30 this year, with long-term plans for 950. The money raised in its IPO will help support that expansion, the company said.
Dive Insight:
Unlike other warehouse retailers, Ollie’s is known for an often-shifting merchandise mix of name brands that it describes as “good stuff cheap.” Shopping at Ollie’s, according to Ollie’s, is therefore a “treasure hunt,” and it’s growth in recent years seems to indicate that shoppers enjoy that. That adventure approach may be aided by Ollie’s own sense of fun — the retailer refers to its warehouses as “semi-lovely” and sports humorous signage in stores.
Ollie’s utter lack of e-commerce makes it unique in today’s retail landscape — and the retailer has no intention of changing that. The company acquires merchandise from name brands that don’t want Ollie’s heavily discounted prices splashed across the web. But apparently its store experience is also unique, and shoppers with an Ollie nearby are happy to trek to the store for that treasure hunt.
The company, indeed, is thriving, in contrast to many dollar stores, which are facing some challenges in an improving economy and a market that may be saturated.
