The Fresh Market IPO Soars by 50%

GREENSBORO, N.C. Reflecting a resurgence in consumer spending, The Fresh Market here had an initial public offering in early November, raising about $290 million. The IPO, in which shares were offered only by the founders and certain top executives, was the first by a supermarket operator in several years. The price rocketed quickly from an opening at $22 per share to $32.50 in the first day of trading

GREENSBORO, N.C. — Reflecting a resurgence in consumer spending, The Fresh Market here had an initial public offering in early November, raising about $290 million.

The IPO, in which shares were offered only by the founders and certain top executives, was the first by a supermarket operator in several years. The price rocketed quickly from an opening at $22 per share to $32.50 in the first day of trading as investors seamed eager for a company that offered growth opportunities, a la Whole Foods.

“I believe that people were exited about the combination of growth, good returns and being in a stable industry,” said one industry analyst, who asked not to be identified. “People seemed to feel there is untapped demand for this concept.”

The Fresh Market operates 100 small-format stores emphasizing high-quality perishables in the East and Midwest, but projected in its prospectus that it could eventually reach 500 or more stores. With an average size of 21,000 square feet, some analysts said the company appears to have plenty of opportunities for growth.

“Assuming good execution, [The Fresh Market] should be capable of generating significant unit growth for an extended period of time,” said Edward Aaron, a Denver-based analyst with RBC Capital Markets, in a report last week. “With half of the company's store base located in only three states (Florida, North Carolina and Georgia), it seems clear to us that the company is indeed nowhere near saturation.”