It’s a buoy: Investors endorse Baby Bunting’s planned growth spurt as shares climb 44% on ASX debut

Mum and dad investors have embraced Baby Bunting’s growth plans, with shares in the baby products retail chain climbing 44% on the company’s debut on the Australian Securities Exchange yesterday.

Shares in the popular brand were issued at $1.40 and reached a high of $2.02 before closing at $1.86 at the end of trade on Wednesday. Baby Bunting shares were trading at $1.90 at midday today.

Baby Bunting was hoping to raise $52 million in its initial public offering and achieved that goal. Following the float, the retailer has a market capitalisation of more than $230 million.

Private investor group TDM Asset Management, which picked up a 30% share of Baby Bunting three years ago, is one of the big winners of the listing, with that shareholding now worth more than $68 million.

Other private investors in the company have retained their shareholdings, including founders Arnold and Gail Nadelman and the retailer’s management team.

The Baby Bunting share offer was oversubscribed and the company’s chief executive Matt Spencer told SmartCompany this morning he attributes the strong demand for shares to an endorsement of the retailer’s growth plans.

“I’m very happy, it’s an endorsement of Baby Bunting’s growth strategy,” he says.

“We have had a good growth strategy and a lot of interest.”

Spencer says the funds raised through the listing will go towards the retailer’s expansion plans.

 “We see a network of over 70 stores with a plan to open four to eight new stores a year, concentrating on organic roll out of stores rather than acquisitions,” Spencer says.

“There’s a long way to go, we’re only 33 stores down and not even halfway through roll-out and growth.”

Spencer says Baby Bunting’s initial public offering had been helped along by the amount of support he had as chief executive.

“The most important thing is having right people around you… choosing the right advice and choosing the right team throughout the process,” he says.

“I’m delighted by the work done by the Baby Bunting team itself, especially the work put in by CFO Darin Hoekman and the finance team which supported us, support from all our advisors and accounting side.

“I could not be happier.”

Spencer says the plan for the next little while will be to get back to business.

“We’re concentrating on serving our customers and bringing the best possible offers to our store every day and every week,” he says.