IPO news: What to look for when Cariloha goes public next week

The trend of using sustainable and eco-friendly products has been catching up rapidly and companies are increasingly shifting their focus to deliver product offerings that are in line with this trend. One such company is Cariloha, which is set to make its market debut next week. Here’s what to look for when it goes public:

IPO details

Cariloha Inc. is slated to go public on Friday, February 11. It will begin trading on NASDAQ under the ticker symbol ALOHA. The company will offer 2.3 million shares at a price range of $12 to $14. The IPO will be managed by a group of underwriters led by Roth Capital Partners.

Company intro

According to its regulatory filings, Cariloha describes itself as an omni-channel brand focused on soft and sustainable bedding, clothing and bath goods made of eco-friendly viscose-from-bamboo. Bamboo is one of the most renewable and sustainable resources on the planet. Cariloha provides customers with eco-friendly alternatives to traditional fabrics and it has developed a full line of products and home goods that utilizes fabrics produced from bamboo.

The company’s offerings include bedding products such as sheets, mattresses, pillows and blankets, apparel such as shirts, active wear and sleepwear, and bath products such as towels, bath sheets, robes and wash cloths. It sells its products through its showrooms, wholesale channel and e-commerce channel.

As of December 31, 2021, the company has a network of 64 showrooms located throughout the US, including Hawaii and the Caribbean. Of these, 29 are located in cruise port destinations, which attracts tourists. Through its partnerships with cruise lines such as Carnival, Disney, Royal Caribbean and Norwegian, Cariloha has the potential to attract new customers to its showrooms.

The company also sells its products through its own website Cariloha.com and on third-party ecommerce marketplaces like Amazon.com and Target.com. For the nine months ended September 30, 2021, approx. 42.5% of the company’s revenue came from its own website and 12.4% came from third-party ecommerce providers.

Financials

Cariloha reported total sales of $48.2 million in 2020 compared to $68.4 million in 2019. Net loss attributable to unit holders was $0.60 million, or $60.93 per unit, for the year compared to net income of $0.44 million, or $44.02 per unit, in 2019.

For the first nine months ended September 30, 2021, the company recorded sales of $34.4 million compared to $34 million in the same period a year ago. Net income attributable to unit holders was $0.29 million, or $29.08 per unit, compared to a loss of $1.7 million, or $179.98 per unit, in the year-ago period.

Market opportunity

Cariloha stated in its filings that it expects to benefit from the shift in consumer preferences towards sustainable products and brands, driven mainly by millennial and Gen Z consumers. As per a 2020 survey conducted by Capgemini, more than 65% of consumers decide to purchase products or services based on their environmental friendliness.

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