Shares of Roots Corp. did not get off to a good start on their first day of trading Wednesday as the stock slid almost 17 per cent on the TSX.
Roots shares finished down $2 from their IPO price of $12. The stock opened the day at $11.50 and dipped as low as $9.48.
Shares of the company are trading under the symbol ROOT on the TSX.
The company said that Searchlight Capital Partners, and an entity indirectly controlled by Roots founders Michael Budman and Don Green sold 16,667,000 common shares in the offering for total gross proceeds of just over $200 million.
“We see a tremendous growth opportunity ahead for Roots, as we continue to execute on our mission to inspire the world to embrace the spirit of the open air,” Jim Gabel, the company’s CEO said in a release. “We are in the early stages of leveraging our strategic operational investments to support our continued growth in Canada, the United States and internationally.”
Reuters reported that Roots faces challenges for its physical stores amid the changing retail landscape, which has seen a swing to online shopping. The news agency also said the company’s growth trailed others in the apparel sector, with Roots saying in its prospectus that it had a 14 per cent compound annual growth from 2014 to 2016, lagging behind the 20 per cent rate of Aritzia Inc.
The debut of Roots follows recent IPO by other Canadian fashion companies, including Aritzia and Canada Goose Holdings Inc. Shares in Canada Goose have soared since they began trading earlier this year, however Aritzia shares have struggled and fallen well below their IPO price.