Teavana is a specialty retailer that sells loose leaf tea and tea making accessories. Predominantly located in malls, the retailer is known for courting shoppers to try the tea, which is premium priced.
The Atlanta-based company is looking to raise roughly $100 million through the sale of 7.1 million shares at an estimated price range of $13-$15 per share. It plans to use the proceeds to redeem preferred stock and pay off its debt. The company's shares will trade on the New York Stock Exchange under the symbol "TEA."
Gaskins like Teavana because of its growth story. The company currently operates 146 stores located in 34 states, and has another 15 franchised locations in Mexico, and it plans to open 50 more stories in 2011, another 60 in 2012 with an aggressive expansion target of 500 stores by 2015.And it seems like there's plenty of room to grow. Tea consumption in the United States is much lower than the rest of the world, ranking 22nd globally. Teavana has grown revenue to $125 million in 2010 from $64 million in 2008 with net income rising to $12 million in 2010 from $2 million in 2008. The company averages $1,000 in sales per foot, which is higher than most specialty retail stores. Teavana believes that its store placement is the reason for some of its success. The company is very careful in choosing where to place its stores. By doing so, its new stores have a payback period of less than one and a half years. The company compares itself at times to Starbucks (SBUX), which also sells premium tea, but also takes pains to differentiate itself. Gaskins like the aggressive plans to grow, but investors should realize that, at some point, demand for tea may not be enough to support the expansion.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV