Sycamore Partners Sells More Than $4 Million in Torrid Holdings Shares to Investing.com

In a recent transaction, Sycamore Partners, a private equity firm known for its significant holdings in retail companies, sold a substantial number of shares in Torrid Holdings Inc. (NYSE:CURV), a plus-size fashion retailer. The shares were sold at a price of $3.80 each, raising more than $4.15 million.

The transaction, which occurred on September 19, 2024, involved the sale of 1,092,442 shares of common stock by Sycamore Partners Torrid, LLC, an affiliate of the Sycamore Partners family. Following the sale, the entity still holds a significant stake in the company, with 73,976,602 shares remaining.

Stefan Kaluzny, director of Torrid Holdings and a key person at Sycamore Partners, is associated with the transaction. The filing indicates that the shares were sold in connection with the exercise of the underwriters’ option to purchase additional shares in a registered public offering. This suggests that the sale is part of a wider funding strategy by the company.

The sale was made at a net price, after accounting for the underwriting discount. This indicates that Sycamore Partners is capitalizing on the opportunity to liquidate some of its holdings in Torrid Holdings while maintaining a significant interest in the company’s future.

Investors and market watchers often pay close attention to these filings to learn how key stakeholders manage their positions in key companies. The sale by Sycamore Partners can be interpreted in different ways, but it undeniably reflects a repositioning of the company’s investment in Torrid Holdings.

As the retail sector continues to evolve, particularly in the specialty apparel market, the moves of prominent investors like Sycamore Partners are being closely watched. The firm’s decision to sell some of its Torrid Holdings stock will likely be of interest to other investors given their own positions in the retailer.

For those interested in the details, details of the transaction are publicly available and provide transparency into the actions of major shareholders such as Sycamore Partners. The sale is a reminder of the dynamic nature of equity ownership in public companies and the strategic decisions that can influence a firm’s investment portfolio.

In other recent news, Torrid Holdings Inc. announced the pricing of an underwritten public offering of 8 million shares, managed by BofA Securities, Goldman Sachs & Co. LLC, Jefferies and William Blair. The shares, sold by certain shareholders, are priced at $4.00 per share. The transaction is expected to close on or about September 13, 2024, with an additional 30-day option for underwriters to purchase up to 1.2 million shares.

Moreover, the company recently reported financial results for Q2 2024, revealing net sales of $285 million and adjusted EBITDA of $35 million, marking an expansion of 12.2% as a percentage of net sales. Torrid Holdings is moving into Phase 2 of its strategy, focusing on product expansion and customer growth. The company expects its net sales for the fiscal year to be between $1.135 billion and $1.145 billion, with adjusted EBITDA expected to be between $110 million and $116 million.

In addition, Torrid plans to optimize its store footprint and expects to close 20 to 25 stores by the end of fiscal 2024. The company also plans to introduce more capsule collections and expand its intimate categories. These recent developments highlight Torrid Holdings’ continued efforts to adapt and grow in the retail environment.

InvestingPro Insights

Sycamore Partners’ recent sale of shares in Torrid Holdings Inc. (NYSE:CURV) sheds light on the company’s current financial position and market performance. According to InvestingPro data, Torrid Holdings has a market capitalization of approximately $417.67 million, indicating its size and relevance in the retail sector. Despite the company’s significant revenue of $1.13 billion in the trailing twelve months from Q1 2023, there was a slight contraction with a revenue decline of 4.31% over the same period.

An InvestingPro tip points out that Torrid Holdings is trading at a high multiple to earnings with a P/E ratio of 30.31. This could suggest that investors are expecting big growth from the company, which aligns with another tip indicating that analysts have revised upward their earnings expectations for the coming period. This optimism is also reflected in analysts’ prediction that the company will be profitable this year.

However, it’s important to note that Torrid Holdings does not pay a dividend to shareholders, which could be a consideration for income-focused investors. In addition, the stock’s recent performance shows a significant price decline of 27.56% over the past one month and a more pronounced decline of 35.38% over the past three months. Despite these near-term challenges, the stock has delivered a high return over the past year, with a total price return of 203.52%, showing volatility and substantial earnings potential.

For those interested in a deeper analysis, InvestingPro offers additional advice on Torrid Holdings, which can be found at https://www.investing.com/pro/CURV. This information could be valuable to investors considering their positions in the retailer or seeking to understand the market’s view of the company’s future prospects.

This article was generated with support from AI and reviewed by an editor. For more information, see T&C.