Costa Mesa-based Anna’s Linens, a bed and bath retailer targeting ethnic shoppers in urban areas, has filed to go public in a stock offering that could raise $69 million.
The company, which runs 182 stores in 12 states, plans to use the money to open more stores, pay off debt and for general purposes.
Anna’s Linens is profitable, according to the company’s filing with the Securities and Exchange Commission. It had sales of $225 million for the 12 months ended Jan. 30, up 45% from a year earlier.
The company had a net profit of $5.3 million for the recent 12 months, up 22% from a year earlier.
Like other retailers, Anna’s Linens’ net income is slim, at about 2% of revenue. The company’s operating profit is 4% of sales.
Industry leader Bed Bath & Beyond Inc. has operating profit that’s 15% of sales. The New Jersey company’s net income is 9% of sales.
In lieu of taking on more private investment, Anna’s Linens is going public to fund expansion. The company had about $2.4 million in cash as of Jan. 30. That’s down from $ 2.8 million a year ago and $3.5 million two years ago.
San Francisco’s Rosewood Capital Associates LLC is an investor in Anna’s Linens, owning about 30% of the company.
Founder and Chief Executive Alan Gladstone is the company’s biggest shareholder at about 50%. The company is named after Gladstone’s grandmother, whose picture appears in its advertising.
Much of the company’s cash has gone toward stores. This year, the company said it expects to spend up to $11.5 million on stores, up from $10 million last year.
The company started on a stores push in 1998 that included a move outside California. In 2003, Anna Linen’s bought 11 store leases from now-defunct Strouds.
This year, Anna Linens said it is looking to open some 50 stores and another 60 next year. The company is eyeing Detroit, Washington, D.C., Baltimore, Milwaukee and Florida, it said in its filing.
The strategy is to open stores in Hispanic and African-American neighborhoods that may have been overlooked by Bed Bath & Beyond and other rivals.
Anna’s Linens has four stores in Orange County, in Anaheim, Buena Park, Garden Grove and Santa Ana.
The company got its start in 1988, a year after discount linen retailers Gemco and Zody’s closed.
“There was a big void by them leaving,” Gladstone said in a prior Business Journal interview. “I could take care of that customer.”
The offering filing is the latest in a recent string for OC companies. In late April, Costa Mesa-based apparel maker Volcom Inc. filed to raise as much as $86 million.
Earlier this year, Santa Ana-based logistics company GeoLogistics Corp. said it plans to go public in an offering that could raise $175 million.
Aliso Viejo-based Buy.com Inc. filed for an public offering in January, which would be the Internet retailer’s second. Buy.com is looking to raise $86 million.
Only one OC company has gone public so far this year, and a big one at that: Irvine subprime lender ECC Capital Corp., which raised nearly $400 million.
Last year, San Clemente-based Sunstone Hotel Investors LLC in San Clemente raised $413 million in the largest stock debut of 2004.
