Another day…another IPO prospectus–

Today, I am taking a look at Torrid.

Let’s dive in—-

Torrid is an omni-channel retailer of apparel. Hmmm..this is a new one. Omni-channel retail? Umm Nordstrom?

So it is a apparel retailer for plus-size women. That is good because the sales of womens’ plus size apparel increased to $20.4 bn in 2016.

Wow, it has explosive compound annual growth rate of 44% in the past three years!

But it using Adjusted EBITDA, which Munger and Buffett say it is a number when GAAP does not show what you want to show.

Good loyal customer base! Backed by Sycamore Private Equity-

Super long risk section—a trend, these days…so long.

Ok, so they have 192,340 debt due within one year and an Adjusted EBITDA of 35,059…that is quite short of what is needed.  They have 23 ml in cash. Still short. The largest amount due is related party promissory note to its parent company, so I guess it is ok.

Cruising through—

No blatant red flags.

No accounting issues….

Nothing weird or funky things on the notes section (at least when cruising by).


What are my thoughts?

It is retail so it is competitive. But plus-size women are growing and Torrid seems to have brand power. Also, they are growing explosively.

But then I look at all the old retail stars who are dying or dead now….

Hmmm…for me, I would pass Torrid. I don’t have enough expertise to work out the details and I don’t see a real moat. 

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