• Cecile Corral

Anna's Linens Set to Go Public

Stock Will Be Traded on NASDAQ as ANNA

Costa Mesa, Calif. —Anna's Linens is on the IPO path.

The 182-store chain last week filed a registration statement with the Securities and Exchange Commission for an initial public offering of its common stock. It is set to be traded on the NASDAQ exchange.

Since 1998, Anna's has been steadily accelerating its expansion with an eye toward an eventual public offering. Founded in 1987, the chain now operates in 11 states coast to coast. Anna's caters to an ethnic customer in densely populated areas with large African American and Hispanic populations. The core Anna's customer earns a median annual household income of $35,000 to $75,000.

In 2004, Anna's earned $5.4 million on sales of $225.2 million, compared with the previous year's net income of $4.4 million on $154.9 million in sales. The opening of 49 new units last year contributed about $45.4 million of the sales increase. The remainder came partially from growing comparable store sales. Both average transaction and the volume of transactions rose, according to the prospectus Anna's filed with the SEC. The boost in transactions resulted from the introduction of new higher price point goods like luxury bedding, dinnerware and housewares, the company reported.

Bedding sales accounted for 40 percent of revenues last year, or $90.1 million, according to the filing. Window coverings made up 21 percent of sales, or $47.3 million, followed by: bath products, 18 percent, or $40.5 million; decorative accessories (decorative pillows, area rugs and slip covers), 14 percent, or $31.5 million; and tabletop/kitchen, 7 percent, or $15.8 million.

As Anna's added personnel last year at both store-level and headquarters to support its growing store base, SG&A expenses jumped 49.1 percent to $57.3 million.

As a percentage of net sales, SG&A expenses increased to 25.5 percent from 24.8 percent in 2003. Expenses associated with preparing for the IPO also contributed to the increased overhead, the company reported.

Gross margin dipped slightly last year to 29.3 percent from 30 percent in 2002. Anna's prospectus attributed the decline to expenses from the opportunistic acquisition of larger-than-usual stores. The company's average footprint is 8,000 to 10,000 square feet.

Anna's has primarily funded its growth with cash flow. The company's main sources of liquidity consisted of $2.4 million in cash and cash equivalents; a $15 million operating line of credit under its bank credit facility, of which $2.4 million was drawn down as of Jan. 30; and cash the company expects to generate from operations during this new fiscal year.

And Anna's intends to keep up the pace of store openings, which have averaged about 50 per year. The retailer expects to spend approximately $13.7 million to open 50 stores this year and $16.5 million in 2006 for 60 units. New markets include Detroit, Washington D.C./Baltimore, Tampa/St. Petersburg, Orlando and Milwaukee. The capital expenditures will be funded by operating income and the proceeds of the IPO offering, according to the company prospectus.

CIBC World Markets and Wachovia Securities will act as joint lead managers for the proposed offering, with SG Cowen & Co. and Wedbush Morgan Securities as co-managers.

Cecile CorralCecile Corral | Senior Product Editor, Home & Textiles Today

Cecile B. Corral has been a product editor with Home Textiles Today since late 2000. She covers the area and accent rug, kitchen textiles, table linens, beach towels, decorative bath and decorative pillow categories, as well as some retail subjects.

Featured Video

  • Live From New York: Fashion Comes Across the Pond

    Camera Icon More Videos

Subscribe to
Home & Textiles Today eDaily
Receive the news you need to know about the trends in the industry delivered right to your inbox.


HTT Cover October 2017

See the October 2017 issue of Home & Textiles Today. In this issue, we look at the Top 25 Online Retailers.  H&TT's exclusive annual ranking of the biggest online sellers of home textiles finds that while pure play etailers continue to fly, bricks & clicks are digging into omnichannel. See details!