Capital Gain

The Fresh Market Proceeds With IPO

Published: in FINTECH by .


The Fresh Market, a specialty grocery chain with 159 locations in 22 states, is going public after five years of operating as a private company. Official word of the company’s preparations for its initial public offering (IPO) first got out in March, when the company announced that it had submitted a draft registration statement with the United States Securities and Exchange Commission (SEC). Now, the company is going ahead with it — on Friday (July 16), The Fresh Market Holdings, Inc., the chain’s parent company, filed an S-1 registration of securities with the SEC.

The company initially went public in 2010, but it was taken private by Apollo Global Management in April of 2016. In its S-1, The Fresh Market states that it has incurred $934 million in outstanding debt “in connection with the Acquisition and in the years following,” and adds that it plans to use the funds generated by an IPO to “refinance a significant portion of this debt, which will reduce our ongoing debt service obligations.”

“We have implemented several key strategic initiatives designed to overcome challenges we faced at and after this going private transaction,” the company states in the filing. “These initiatives included a merchandising refocus on our core premium fresh food, introduction of new curated meal offerings, competitive prices on frequently shopped items such as bananas, avocados, milk, lemons and butter, improved in-store execution, and investments in omni-channel capabilities and technology.”

To the investments in meal offerings, the company is piloting a new “Kitchen Square” grocerant, which will sell prepared baked goods for dinner, lunch salads, and barbecue and pizza options for dinner. Part of the goal of this concept is to “attract a younger demographic.” Prepared meals are a focus of many grocery chains right now, as the digital shift blurs the once distinct categories of grocery and restaurant.

Additionally, the company is investing $7 million in its “Market Meal Kit walk-around cases,” eyeing ready-to-cook meal kits as a way to drive up basket size. These investments aim to capitalize on consumers’ habit changes following the initial outbreak of the COVID-19 pandemic, aiming to “win with both existing and new guests who experienced a heightened engagement with food-at-home in 2020.”

Data from the PYMNTS study, The Bring-It-To-Me Economy: How Online Marketplaces And Aggregators Drive Omnichannel Commerce, created in collaboration with Carat by Fiserv, find that two-thirds of consumers are now ordering restaurant meals to be eaten at home, and that these restaurant customers are 31 percent more likely to order restaurants for off-premises consumption than on-premises.

Similarly, the pandemic sent demand for meal kits skyrocketing, and a YouGov survey of 350,000 people conducted in April found that much of this demand is likely to stick around. Specifically, 75 percent of meal kit subscribers reported that they intended to stay subscribed throughout the next year. Plus, these subscribers are more than three times more likely than the general population to order groceries online. This means that, by attracting meal kit subscribers, The Fresh Market has the opportunity to build a digital relationship with its customers, a strategy that will be key to succeeding in grocery’s omnichannel future.

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NEW PYMNTS DATA: GENERATION SUPERCONNECTED – THE COMING USER AUTHENTICATION SHIFT

About The Study: Superconnected consumers use a variety of connected devices to interact, shop and pay online, but say password-based authentication slows them down. PYMNTS surveyed 2,127 consumers and found that these highly connected, highly desirable customers want financial institutions (FIs) and merchants to ditch the password and provide a better and more secure way to authenticate themselves online.



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