RedEnvelope, which has a history of losses, has announced an initial public offering.
The San Francisco-based gift cataloger reported a $7.7 million net loss for the year ended March 30. However, that loss was almost half the one reported for the prior year.
The company, which also sells via the Internet, is offering 2.2 million shares of its common stock at a proposed price of $14 per share. The shares will be traded on Nasdaq.
The offering is being underwritten by WR Hambrecht & Co. and co-managed by Pacific Crest Securities.
The underwriters have been given the option to buy up to 330,000 additional shares to cover over-allotments.
In its prospectus, the company reported net revenue of $70 million for the fiscal year that ended in March, compared with $55.7 million for the prior year.
Sales totaled $17.7 million for the three months that ended on June 30, compared with $15.2 million for the comparable period last year. The quarterly net loss fell to $1.2 million from $2.294 million.
The firm was founded in June 1997 under the name Giftworks Online, later changing its name to 911 Gifts Inc. Two years later, the company reincorporated and changed its name to RedEnvelope.
The firm warned in its prospectus that it has “a history of significant losses.” Other risk factors include its limited operating history and the seasonal nature of its business.
However, the company said it believes it can grow by pursuing the following strategies: improved marketing efficiency, product innovation, cost efficiencies and a strong customer acquisition program.
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