NEW YORK (Reuters) – Vitamin Shoppe Inc (VSI.N) shares soared in their first trading session after the health supplement retailer’s IPO priced above expectations and became the first U.S. retailer to go public in two years.
Its shares were up 16 percent to $19.67 on the New York Stock Exchange, after rising as much as 19 percent shortly after the opening bell.
Vitamin Shoppe sold 9.1 million shares for $17, more than the expected range of $14 to $16. The chain will get net proceeds of $121 million from the IPO which it will use for the redemption of preferred shares and paying down some of its debt.
Vitamin Shoppe, a North Bergen, New Jersey-based operator of 434 health supplement stores in the United States, became the first brick-and-mortar retailer to go public since the Oct. 2007 IPO by beauty products chain Ulta Salon, Cosmetics & Fragrance Inc (ULTA.O).
Vitamin Shoppe’s sales rose at an annual clip of 11.3 percent between 2005 and 2008, when they reached $601.5 million. During that time, it opened 171 new stores, according to its prospectus. The company has been profitable since 2006.
In its prospectus, Vitamin Shoppe estimated it could eventually reach 900 stores in the United States.
The Vitamin Shoppe IPO is being managed by JP Morgan, Bank of America Merrill Lynch and Barclays Capital. The underwriters will have the option of buying another 1.4 million shares from Vitamin Shoppe’s selling shareholders. (Reporting by Phil Wahba; Editing by Derek Caney)