Believe A Serious Recession Is Imminent? This IPO May Be Just Right For You: CNBC

If you believe a serious recession is imminent, the IPO for you may have arrived. Savers Value Village, the largest for-profit thrift store operator in the U.S. and Canada, is going public Thursday at the New York Stock Exchange, CNBC reports.

Thrift is Cool

According to CNBC, the second-hand market was estimated at $35 billion in 2021 and is expected to grow to more than $82 billion by 2026. Savers Value Village operates 317 thrift stores under various brands in the U.S., Canada, and Australia. They buy secondhand clothes, bedding, shoes, accessories, housewares, books, and other items from nonprofit thrift stores or from on-site donations at Community Donation Centers at their stores, and then resell them.

The Eco-Angle

The company also emphasizes the environmental impact of their business model. With the average U.S. citizen throwing away 81 pounds of clothing each year, 95% of which could have been re-worn or repurposed, thrift stores provide an effective solution in mitigating the environmental cost of clothing and extending its life, CNBC noted.

Data Analytics and AI

Savers Value Village also utilizes data analytics to elevate the quality of their delivered supply by focusing on supply sources with quality goods, which has been a significant driver of their gross product margin, according to the company.

A Respectably Sized IPO

The company plans to offer 18.8 million shares at $15-$17. At the midpoint, this would raise $301 million, with a fully diluted market value of $2.8 billion. This is a very respectably sized IPO, and is a sign that the IPO market is (slowly) starting to reopen, CNBC reported.

The IPO for the Recession Crowd?

If the U.S. goes into a serious recession, thrift stores like Savers Value Village could benefit significantly. The market for thrift stores would be very strong, making this IPO particularly appealing for those who believe in the “imminent serious recession” story, according to CNBC.

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