Zumiez stock proves zoomy
Published 9:00 pm Friday, May 6, 2005
EVERETT – Zumiez, a name better known among skateboarding teenagers than necktie-wearing stock traders, created a buzz on Wall Street Friday after the retailer’s stock zoomed up 38 percent on its debut day.
That performance made the Everett-based company’s initial public offering one of the most successful in recent history. It also netted $31.3 million, after deducting underwriter fees and commissions, to help Zumiez continue its expansion.
The Nasdaq stock – traded under the ZUMZ symbol – was priced late Thursday at $18 a share, above its initially projected range of $15 to $17.
When trading opened, however, Zumiez’s price leapt above $20 and never looked back. The stock closed the day at $24.87.
“This is an impressive performance, given how bad most IPOs have been so far this year. Some of the companies have been absolutely brutal,” said Tom Taulli, co-founder of Current- Offerings, which tracks IPOs from Newport Beach, Calif.
“But this would be a strong performance in any market,” he added.
For comparison, consider what happened to the two other stocks that debuted Friday. Bois d’arc Energy LLC, a Texas energy exploration company, began at $13 a share and closed at $12.65. China Techfaith, a Beijing-based designer of mobile phone equipment, began at $16.25 and closed at $15.32.
Although Zumiez Inc. is new as a publicly traded company, it has operated profitably and grown consistently during its 27 years as a privately held company.
In 1978, Tom Campion and Gary Haakenson quit their jobs at the J.C. Penney store in Seattle’s Northgate Mall to start Above the Belt, a store that specialized in cutting-edge fashions. They opened a second store the following year at Everett Mall.
In the mid-1980s, the then small chain changed its name to Zumiez, pronounced “zoomies,” to avoid conflict with another business.
Since then, the company has sharpened its focus on apparel, shoes and accessories aimed at skateboarders, snowboarders, surfers and bike riders under 24.
“Our kids are a little edgier, a little more punk, and have a little more attitude,” Campion said in 2003.
A private investment group acquired a minority stake in Zumiez in 2002 and jump-started the chain’s expansion. It now operates 140 stores in 18 states.
During the past five years, sales have grown at an annual rate of 27.5 percent. Zumiez, which has never ended a year with a loss, had a net profit of $7.3 million in its most recent fiscal period, on gross revenue of $154 million.
Zumiez executives could not comment on Friday’s IPO because of federal Securities and Exchange Commission rules.
Friday’s IPO was the first for a Snohomish County-based company since Quinton Cardiology Systems Inc. of Bothell went public in 2002. The medical device company’s stock rose less than 3 percent on its first day, even after the initial offering price was cut in half.
“Zumiez is far and away the most successful IPO we’ve ever had,” said Tim Raetzloff, the Edmonds businessman who created and tracks local stocks on the Abarim Snohomish County Stock Index. With Zumiez’s debut, his index now tracks 13 public companies.
Reporter Eric Fetters: 425-339-3453 or fetters@heraldnet.com.
