Thrift-store operator Savers Value Village soars in trading debut, but gas and insurance issues flounder

By Ciara Linnane and Tomi Kilgore

Kodiak Gas and Fidelis Insurance priced below their proposed range and traded lower

Thrift-store operator Savers Value Village Inc.'s stock soared 37% in its trading debut Thursday, but two other new deals floundered, suggesting investors remain somewhat wary of new offerings.

Bellevue, Washington-based Savers Value Village Inc. appeared set for gains after it priced late Wednesday above its proposed range.

But both Texas-based Kodiak Gas Services Inc. and Fidelis Insurance Holdings Ltd. fell in early trades after pricing below range and making other accommodations to get their deals through.

Bermuda-based Fidelis, a reinsurer, downsized its deal to 15 million shares from previous expectations it would offer 17 million. The initial public offering priced at $14 a share, below the proposed $16 to $19 range.

Maker of oil- and gas-production equipment Kodiak opened almost 3% below its issue price of $16, which was well below its proposed price range of $19 to $22.

The deals come after two recent IPOs -- both of restaurant chains -- were greeted with euphoria, raising hopes the market was finally thawing after a deep freeze.

Just 50 IPOs have priced so far this year, according to Renaissance Capital, a provider of IPO exchange-traded funds and institutional research. That's up 28% from the same time a year ago, when the market was static.

Total proceeds raised come to $8.5 billion, up more than 100% from a year ago but well below the levels seen in 2021 and earlier.

That was meant to change after two recent IPOs: those of Cava Group Inc. , an unprofitable Mediterranean-style fast-casual chain that went public in early June at $22 a share and was last traded at $42.99, and Gen Restaurant Group Inc. , a profitable Korean barbecue chain that went public Wednesday at $12 a share and was last quoted at $15.33.

Investors were hoping those deals might entice issuers from other sectors that have been absent for some time, such as tech.

See now:Money-losing food chain Cava showed IPO success. Is it finally time for some tech deals?

Savers Value Village has the advantage of being the biggest for-profit thrift-store chain in North America. The company has 317 stores that operate under different names.

The company is profitable, with net income of $11.9 million in the quarter through April 2, after a loss of $10.2 million in the same period a year earlier. For all of 2022, it had net income of $84.7 million, up from $83.4 million in 2021.

Revenue for the quarter came to $327.5 million, down from $345.7 million in the year-ago period. Revenue totaled $1.4 billion for 2022, up from $1.2 billion in 2021.

Kodiak, meanwhile, had a loss of $12.3 million for the quarter through March 31, on revenue of $190.1 million.

Fidelis had net income of $1.7 billion in the quarter through March 31 on revenue of $2.05 billion, but that was mostly due to a one-time gain from a related party that handles original, underwriting and claims management.

The Renaissance IPO ETF (IPO) has gained 30% in the year to date, while the S&P 500 has gained 14%.

-Ciara Linnane

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06-30-23 0619ET

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