Lorna Jane won’t rule out floating on the ASX

Active wear retailer Lorna Jane isn’t ruling out listing on the Australian Securities Exchange this year. 

A spokesperson for the business and for part owner Champ Ventures both declined to comment to SmartCompany on reports in The Australian Financial Review that Lorna Jane is preparing for an initial public offering.

The newspaper reports the private equity firm which owns a 40% stake in Lorna Jane is keen to offload the business. 

Lorna Jane turned over $110 million in 2012-13 and the majority stake continues to be owned by founders Lorna Jane and Bill Clarkson.

Lorna Jane Clarkson, a Cairns dental therapist and part-time aerobics instructor, founded the chain in 1990 and said she had used “an old swimsuit for the pattern for her first leotard”.

Clarkson is “chief creative officer” and her husband is chief executive.

Retail Doctor Group chief executive Brian Walker says reports of an IPO are “hardly surprising”. 

Walker says Lorna Jane has been a successful investment for Champ Ventures with its offshore expansion plans continuing at “a rate of knots” with stores opening in the United States and the United Kingdom.

“Champ Venture’s motivation for an IPO could be that there is a specific time horizon for the fund so it has to return funds to investors, or a view that Lorna Jane has hit its peak and Champ Ventures might be wanting to get out while it’s hot,” Walker says.

“Otherwise the bankers and equity firms might step in and it’s done privately.”

But Walker warns while an IPO may be “a logical move” it can also have its problems for a business.

“An IPO really changes the nature of a business; there are shareholders, much more regulation and by definition you are much more exposed and on show,” he says.  

“Then there’s the question of how it would perform in an IPO. In the retail community, Lorna Jane is very well known, but it depends on Lorna Jane’s economic attraction to the market compared to other businesses.”

Walker says most retail stocks, with the exception of Oroton, have risen 20% to 30% in the last 12 months. 

“Retail stocks are bouncing back at the moment and so there is an appetite for this,” he says.