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#BamaRush Fashion Phenom Planning to Go Public

A digital retailer for fashion-loving Gen Z and millennial women is on the path to going public.

On Tuesday, Chico, Calif.-based Lulus Fashion Lounge filed documents with the Securities and Exchange Commission for an initial public offering, using $100 million as the placeholder sum it says it plans to raise.

Selling affordably priced denim, shoes, sweaters and more, with most items under $50, the online retailer rocketed into the spotlight this summer when Southern sorority hopefuls name-dropped the e-tailer in myriad #BamaRush TikTok videos detailing their head-to-toe rush-week ensembles. The fleeting August phenomenon underscores Lulus’ success in catering to the needs of high-school and college-age women, with curated landing pages showcasing dresses for homecoming dances, Greek life, prom and all things wedding.

Lulus’ “test, learn and reorder” strategy seems to be bearing fruit. Though the company widened its net loss for the year ended Jan. 3, 2021 to $29.3 million from a net loss of $469,000, and net revenue slipped 33 percent to $248.7 million from $369.6 million in 2019, its outlook seems brighter. Estimated net income for the three months ended Oct. 3, 2021 is pegged between $3.3 million and $3.9 million from net income of $377,000 in the year-ago period. Estimated net sales are projected between $104.5 million to $106.3 million from $54.5 million a year ago, attributable to an “increase in active customers and customer spend coupled with fewer markdowns and promotional discounts.”

The e-commerce company’s 2.5 million active customers show promising loyalty, with repeat shoppers driving 65 percent of sales. More than 2 million new followers now augment the 5.5 million social media devotees Lulus tallied on Sept. 27, 2020, with 2.1 million alone on Instagram and another 424,000 on TikTok. Coming from households with an average income of $82,000, customers shell out a median of $1,175 on fashion each year.

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“Consumer surveys in 2019 and 2021 show that [the company] outperforms its peers significantly in net promoter score, customer satisfaction, overall value, and likelihood of repurchase; these metrics demonstrate our customers’ genuine affinity for our brand,” it said.

Lulus, one of the most name-dropped fashion brands of August’s viral #BamaRush sensation, filed paperwork for an IPO.

Lulus’ data-driven approach to product creation and curation eschews the traditional merchandising model reliant on extended design cycles, deep buys and limited customer feedback leading to steep markdowns. Instead, it trials product in small batches, monitors customer reaction and then reorders high-demand items to optimize profitability.

“This strategy allows us to rapidly convert new products into profitable sales on a consistent and repeatable basis while minimizing fashion and trend risk,” it said.

For the six months ended July 4, 2021, 70 percent of sales came from reorders (up from 66 percent the prior year) and 94 percent of reordered products “sold without moving to sale pricing,” it noted, up from 89 percent.

Lulus started as a brick-and-mortar boutique back in 1996 but fully transitioned to a direct-to-consumer model in 2009 after opening an e-commerce site in 2005. Miami’s H.I.G Capital, a private equity firm, made a strategic investment in 2014 when the company formalized the Lulus brand. Two years ago, it launched an app, which is now available for Android and iOS.

Lulus’ IPO plans come as Solo Brands and Rent the Runway also intend to float shares. On, Dr. Martens, and ThredUp have all listed this year in a bustling IPO market.