US retail sector IPOs to dwindle after rising to record in 2013

E-commerce sector to see most retail IPOs in 2014, according to BDO study

After a record year for initial public offerings in the US retail and consumer products sector, a drop is expected by a majority of chief financial officers this year as companies undergo a wave of restructuring as well as mergers and acquisitions, according to a study by professional services firm BDO USA.

The BDO survey shows that 58 percent of retail sector CFOs expect the number of new listings in the industry to decline in 2014 after rising to a record in 2013. Last year saw 19 IPOs yielding total proceeds of $8.3 bn, from 15 IPOs valued at $2.8 bn in 2012.

One in three CFOs surveyed, however, predict that IPOs will increase this year – more than double the number that made a similar prediction at the start of 2013, BDO says in a press statement.

About half of the 100 CFOs surveyed from companies across the US predict most IPOs will come in the e-commerce sector, a quarter see the bulk of offerings coming from non-food and consumer products, while 12 percent cite the food and beverage sector.

More than a third of the CFOs say the main factor in determining the number of IPOs in the sector this year will be the strength of the US economy and stock markets. About three in four also predict that ‘financial market instability will likely remain an obstacle for retailers when it comes to accessing capital and credit in 2014,’ BDO says.

Across all sectors, IPO activity jumped worldwide last year in both number and total proceeds. The number of offerings increased 48 percent to 300 from 203 in 2012 and total proceeds rose 37.5 percent to $137 bn from $99.6 bn, according to data compiled by Renaissance Capital. IPOs in the US alone rose to 222 from 128 the previous year and total proceeds increased to $55 bn from $43 bn. 

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