Plano European Wax Center files to be released as consumer spending accelerates

Hair removal is not just vanity. It is also a very big deal.

In 2019, before the COVID-19 pandemic closed retail stores and confined shoppers to their homes, the Plano-based European Wax Center provided more than 21 million waxing services at 800 locations across nationwide and generated $ 687 million in revenue.

The pandemic deeply affected its business last year, but franchise and company-owned stores still managed to deliver 13 million waxes, as well as sell enough skincare and other products. beauty products to generate $ 469 million in revenue.

With consumer spending rebounding this year, the North Texas transplant wants to be made public as it plans a nationwide expansion of its franchise business. The company has applied for initial share offering Wednesday, with the intention of listing its shares on Nasdaq under the symbol EWCZ.

The company’s file with the U.S. Securities and Exchange Commission did not list the share price. He said he plans to raise $ 100 million from the sale of shares – a common figure used by companies until the share price and number of shares to sell are finalized.

Executives at the European Wax Center could not immediately be reached for comment.

In the regulatory filing, the company said its financial results for 2020 have been hit hard by the COVID-19 pandemic mitigation measures put in place across the country. In March 2021, nearly all of the European Wax Center locations reopened, according to the company.

Across its store network, sales also returned to pre-pandemic levels in March after dropping to 0% in April 2020 when many businesses were forced to close, according to the filing.

European Wax Center, founded in 2004 by brothers Joshua and David Coba, moved its headquarters from Hallandale, Florida to Plano’s Granite Park office park, near the intersection of Highway 121 and Freeway Dallas North toll plaza in early 2020. The company has a total of 808. locations in 44 states, all of which are franchise locations with the exception of five company-owned stores.

The company sees a potential market of $ 18 billion for its out-of-home hair removal services and believes it can quadruple its number of stores in the United States over the next 15 years, according to the filing. It plans to open up to 60 new locations this year alone and estimates that it currently only serves 4% of the total waxing market.

The company achieves significant recurring revenue through its Wax Pass program, a program that allows customers to prepay for a bundle of tours or unlimited tours. The program accounted for approximately 60% of European Wax Center customer transactions last year. And 15% of the company’s transactions in 2020 included the purchase of beauty care products in addition to other services.

European Wax Centers is owned by private equity firm General Atlantic Equity Holders, which has also invested in companies such as Wish, Chime, DuoLingo and Buff City Soap, which also recently moved its headquarters to Dallas.

General Atlantic intends to retain more than 50% of the outstanding shares or combined voting rights of the European Wax Centers and may appoint an undetermined number of directors to the company’s board of directors, according to a filing.

Some of the risk factors the company faces include the impact of the ongoing COVID-19 pandemic on business, its reliance on franchisees’ ability to maintain the brand, and its reliance on -visits a limited number of international suppliers for its products, depending on the dossier.

The company also said it does not plan to pay dividends in the “foreseeable future” due to its debt and growth plans. European Wax Center was in debt of $ 181.2 million as of March 27, according to a file.

North Texas has seen a constant parade of companies going public this year, including Plano-based Alkami, which launched an IPO in March. Others, like Stryve, the Plano-based snack brand and fintech company Katapult, are going public through PSPC mergers – a popular way to avoid IPO requirements.

The second quarter of 2021 was the hottest in two decades in terms of the number of operations and revenue for public companies through IPOs, according to IPO analysis firm Renaissance Capital. A total of 115 IPOs raised $ 40.7 billion in the United States, while PSPC activity fell 79% from the previous quarter.

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