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Poised to Go Public, Revolve Eyeing Billion-Dollar Valuation

Revolve will be the next fashion company to join the ranks of the newly listed, following on the heels of Levi Strauss & Co. and Kontoor Brands earlier this year.

The company is an online fashion retailer that caters to the millennial and Gen Z male and female cohorts. According to a regulatory filing a week ago, Revolve hopes to raise at least $200 million through the sale of nearly 11.8 million Class A common stock, priced between $16 and $18 a share. At $17 a share, the mid-point range, Revolve would have a valuation of $1.2 billion. The company is slated to go public during the week of June 3.

The shares will trade on the New York Stock Exchange under the symbol “RVLV.” While most of the proceeds will be used as working capital, a portion–around $41 million–will be used to buy back shares of Class B common stock from two of the firm’s largest investors, TSG Capital and Capretto.

The filing indicated that the company posted profits of $30.7 million on sales of $498.7 million last year. That’s up from just $5.3 million in profits on sales of $399.6 million in 2017. The company said that 75 percent of its sales are at full price, and that the average order value is $304.

Founded by Michael Karanikolas and Michael Mente in 2003, the Los-Angeles-based company operates a platform that connects more than 45,000 apparel, accessories, footwear and beauty stock keeping units with its customer base. Because Revolve targets a younger customer base, many of the 500-plus brands sold on its site are considered new and emerging lines. Revolve does own 19 brands that are sold on the site as well .

The company also said in the filing that it has proprietary technology that can leverage data from “hundreds of thousands of styles, up to 60 attributes per style, and millions of customer interactions” for decision making via automated inventory management, pricing and trend-forecasting algorithms.

Following the IPO, both co-founders will continue to control the majority of the voting rights through their Class B shares, which have 10 times the voting rights as their Class A equivalents.