22 May Irvine-based Boot Barn considers move into stock market
To those who have never walked into a Boot Barn store, let’s clear up some likely misconceptions.
For one, the store did not originate in Texas or anywhere in the Midwest. And second, its core customer isn’t a rodeo cowboy — even though the retailer has partnered with professionals in the field to promote the brand.
In reality, the company, arguably one of the largest Western-wear businesses in the nation, started as a single storefront in Huntington Beach before growing into more than 150 stores.
Its clientele ranges from fashionistas on the hunt for rhinestone-studded belts and handbags to workers seeking footwear that can withstand the grit of construction sites.
“There’s no real cowboy story,” said Patrick Meany, son of founder Ken Meany and former company chief executive. “Half of the business was work boots and work apparel. The Western (portion) got bigger and bigger over time.”
The homegrown business, which still calls Orange County its base, has been swiftly yet quietly growing its presence nationwide under its current owner, Los Angeles-based private equity firm Freeman Spogli Co.
Boot Barn’s next big move is possibly going public later this year.
Freeman Spogli — which bought Boot Barn in 2011 for an undisclosed amount from another private-equity company — may unload its investment through an initial public offering, according to a recent Reuters report.
And while the value of the possible IPO is unclear, it’s likely big numbers are involved. Current financial data for Boot Barn, which declined interview requests, are unavailable. But Marwit Capital, which owned the company between 2007 and 2011, said its revenue grew 166 percent during that period.
Brick-and-mortar retailers like Boot Barn haven’t been the exciting headline in IPOs lately.
Instead, it’s been companies with a tech edge or innovative business model that have dominated the overall retail IPO market, said Nikki Baird, managing partner and retail analyst at RSR Research. Hot investments have included websites that offer flash sales and deals. They include Gilt, which offers luxury goods, and Coupons.com.
“That said, it’s not like the IPO market is inaccessible to retailers,” Baird added. “Retail tends to be further down the list when it comes to investor dollars, so if investors are comfortable enough going back to traditional retailers, then that’s good news for them.”
Freeman Spogli, which did not respond to a request for an interview, has invested more than $3 billion in private-equity capital in 50 companies in the past three decades. Its investment portfolio also includes Costa Mesa-based chain El Pollo Loco, Petco and home-furnishing company Sur La Table.
Cowboy couture, as some fashion magazines have called it, has been surfacing on fashion runways.
Chanel designer Karl Lagerfeld broke out country-Western hats and boots at a recent show in Dallas. New York Fashion Week’s fall preview displayed similar styles.
Some credit the trend to country music, including singer-songwriter Taylor Swift, who in her early years often would pair cowboy boots with her dresses.
Boot Barn’s success, however, hasn’t hinged on fashion trends, Meany said.
“We have a consistent customer base,” added Meany, who left the company as chief executive in 2012 but still has a stake.
Another advantage for Boot Barn has been the fragmented nature of the Western-wear market.
Existing chains tend to dominate pockets of the country, such as Texas and Colorado, whereas Boot Barn has been able to expand throughout the country through bulk acquisitions.
“There’s not a lot of competition,” Meany said. “They can capitalize on their size. They bigger they get, the more buying power they have.”
The company in 2012 acquired 29 RCC Western Stores, a regional chain based in Rapid City, S.D., and more than 60 years old. Boot Barn most recently acquired 30 storefronts from Houston-based Baskins, which dominated in Texas and Louisiana.
“Adding Baskins to the Boot Barn family enables us to bridge our West Coast and East Coast presence and provides us with immediate entry into the core markets of Texas and Louisiana with a critical mass of store locations,” said Jim Conroy, current Boot Barn chief executive, in a statement last year.
Unfamiliar with fashion trends and Boot Barn spreadsheets, David Harless is an Orange County construction worker who wants a good pair of boots made for concrete work.
Is the work tough?
Harless, 48, points to his tattered, dust-swallowed shoes.
“I go through three pairs a year,” said Harless, who prefers the Georgia Co. brand, which retails for up to $250 a pair.
Time and time again, for the past 10 years, he’s come back to Boot Barn for his replacements.