Is Savers’ $4B Thrift Store Valuation a Good Sign for Retail or a Bet on Budget Shopping?

Savers Value Village (SVV.N), the thrift store operator owned by private equity firm Ares Management (ARES.N), made a splash in its market debut on the New York Stock Exchange, with a market capitalization of nearly $4 billion. 

Savers Value Village joins a growing list of companies that have enjoyed warm receptions in recent months, signaling a potential thaw in the once frosty IPO market. This revival of investor interest could encourage other IPO hopefuls to list their shares after waiting out the stormy economic climate of 2022.

Combined with lower volatility and the U.S. Federal Reserve’s decision to pause rate hikes, this positive trend is expected to widen the IPO window as the year progresses.

Savers Value Village’s decision to go public was driven by the lack of a strategic buyer that could accommodate its large size. Savers’ CEO Mark Walsh stated that the IPO was the smartest option for the company to move forward, considering it is nine times larger than the next largest for-profit thrift operator.

The stock opened at $24.77 per share, a 38% increase over the IPO price of $18 per share. Savers Value and Ares raised over $401 million in the share sale.

This successful IPO debut for Savers Value Village demonstrates investor confidence in the growing thrift store sector, which has grown at an estimated CAGR of 4.5% over the past five years. Other thrift store retailers may see this as an opportunity to consider going public or expanding their operations to meet the growing demand for sustainable and affordable shopping options.

Ares plans to retain an 88% stake in the company which they acquired in 2021. Savers was founded in 1954, and currently has over 300 locations across the US, Canada, and Australia under the names Savers, Value Village, and Village des Valeurs.