Showroomprive Shares Drop After Retailer Priced IPO at Low End

  • Stock falls as much as 14% in Paris stock market debut
  • Share sale valued French company about 660 million euros

Showroomprive shares fell as much as 14 percent in the online retailer’s first day on the Paris exchange after the company and its owners sold shares for 256 million euros ($280 million) in an initial public offering that was priced at the low end of a range.

Based on the offer price of 19.50 euros per share, Showroomprive’s market value was about 660 million euros, the company said in an e-mailed statement. That price was the bottom of the initial range of 19.50 euros to 26.30 euros a share announced earlier this month. The stock fell 11 percent to 17.44 euros on Friday as of 11:36 a.m. in Paris.

Showroomprive is seeking to expand beyond France amid intensifying domestic competition from bigger rivals such as Vente-Privee.com SA and Amazon.com Inc. Deezer, another French startup, this week postponed its IPO project, citing market conditions. The company, which sells music streaming packages, said it will review other fundraising options.

“We’re happy with the result especially as many IPOs have been canceled or pushed back because of a bad market,” Showroomprive co-Chief Executive Officer Thierry Petit told Radio Classique about the offer result before the market opened. “We saw during the roadshow that investors like our model, even in a complicated context like this one.”

French flash-sales sites, which offer goods at a discount for a limited period online, are targeting shoppers in neighboring countries to cope with a crowded market at home. Showroomprive has said it plans to use the funds to grow outside its domestic market and possibly for acquisitions. France made up 85 percent of Showroomprive’s sales last year, Petit said.

In the IPO, Showroomprive raised 50 million euros through a share capital increase, while existing shareholders sold stock for about 176 million euros. In addition, China’s Vipshop Holdings Ltd. invested 30 million euros, Showroomprive said.

Rothschild & Cie acted as financial adviser in the IPO.

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