Canadian fast-fashion retailer Groupe Dynamite Inc. has filed a preliminary prospectus for an initial public offering on the Toronto Stock Exchange X-T.
The Montreal-based owner of women’s clothing store chains Garage and Dynamite filed the documents with Canadian securities regulators on Thursday. The retailer disclosed that its revenue and net income have been growing in recent years, and noted in the prospectus that it plans to further grow its store presence in the United States and to expand to international markets. It currently has 299 stores in the U.S. and Canada.
The number of shares and offering price for the IPO have yet to be announced.
The nearly 50-year-old company began with its first Garage store in the Place Versailles shopping mall in 1975, selling clothing and accessories. It launched Dynamite in 1983, to sell dressier fashions including office and party wear to slightly older shoppers. Garage became known for targeting a younger consumer with more casual styles.
Its owner and CEO, Andrew Lutfy, began working at the Place Versailles store in 1982 as a part-time stock clerk at the age of 18, worked his way up into management roles and acquired a minority stake in the business within a few years. By the early 2000s, Mr. Lutfy and related entities completed the acquisition of the entire company.
At first limited to the Quebec market, the company began opening stores across Canada in the 1990s, followed by a U.S. expansion in the late 2000s. It now has 185 stores in Canada and 114 in the U.S., across 37 states, as well as e-commerce operations.
The company currently employs roughly 6,000 people, approximately 70 per cent of them working part-time.
Groupe Dynamite was among the retailers hit hard by the COVID-19 pandemic, and sought creditor protection in 2020.
After its restructuring, sales and profits have grown in recent years. In its last full fiscal year, ended Feb. 3, 2024, Groupe Dynamite’s revenue grew nearly 15 per cent to $800.8-million, compared with $697.4-million in the prior year. Net earnings grew to $85.8-million, up from $62.8-million the year before, according to the filing.
In the 12 months ending Aug. 3, the company had revenue of $888.4-million and net earnings of $127.8-million, according to the prospectus.
Groupe Dynamite has been working on refining its store presence. Since early 2022, it has opened 45 new locations but also closed 48 over the same period, and renovated or relocated 15 more.
The company is also planning to move further to international markets such as the United Kingdom, starting with e-commerce expansion followed by store openings.
Groupe Dynamite’s business strategy focuses on quick turnover of the inventory in its stores, using an in-house design team to chase trends as they arise and “constantly creating exciting newness,” according to the documents. The company develops roughly 1,800 new styles each year, the documents said. Most of its products are sourced from China, with additional sourcing from Bangladesh and Cambodia.
The offering is being led by Goldman Sachs Canada Inc., BMO Nesbitt Burns Inc., RBC Dominion Securities Inc. and TD Securities Inc. The company plans to list the shares under the symbol GRGD.