Baby Bunting Limited (ASX: BBN) has enjoyed a strong debut today with the shares soaring as much as 44%. They hit a high of $2.02, up from an offer price of $1.40, but have since retreated to $1.88.
So What: The company was founded in 1979 and is Australia's largest specialty retailer of baby goods, such as prams and cots, toys and babywear, as well as nursery furniture, car safety equipment and feeding.
It currently operates from 33 sites across Australia with the ambition to expand into more than 70 stores. The company raised more than $50 million from the float of its shares and will use the cash to pay down debt, leaving it in a net cash position.
Now What: Bellamy's Australia Ltd (ASX: BAL) has proven how lucrative the baby market can be with its shares soaring 460% since their ASX debut in August 2014.
However, investors shouldn't be too quick to assume Baby Bunting can do the same as Bellamy's. Indeed, Bellamy's has enjoyed incredible growth due to the strength of its brand, the structure of its operations and the fact that its products sell in a heartbeat from store shelves.
Put simply, the company has drastically exceeded expectations, and the same should not simply be assumed for Baby Bunting ahead of time. Still, Baby Bunting has grown sales strongly in recent years (with further growth forecast for this year) and could certainly be a stock to watch.
