Roots Opens Two New U.S. Stores, Stock Still Shy of IPO Price

Toronto-based retailer Roots Corp. (TSX:ROOT) has been on a bumpy ride since going public October 25, 2017. The iconic Canadian company, best known for its casualwear, footwear and leather goods, raised $200 million during its IPO, but did so by selling more shares than original anticipated as the price was dropped to $12 per share from the expected $14-$16 range.

Still, those shareholders were clobbered initially, as shares sunk to as low as $8.55 on November 1 (Roots’ sixth trading day as a public entity) before starting to slowly recover. While much of the lost ground has been retaken, only twice (January 31 and February 1) has the stock crossed the $12 IPO price.

Three days after hitting a three-month low at $10.38, shares of ROOT closed at $11.17 on Tuesday.

Wednesday morning, Roots said that it intends to widen its U.S. footprint in June by opening two new retail locations in the Greater Boston area. The first new store will be in the upscale Natick Mall and include more than a typical Roots location. In addition to sweats and accessories, shoppers will be able to customize leather bags and awards jackets and enjoy a customer lounge, amongst other things, at the nearly 4,000-square-foot store.

The second new location will be at MarketStreet Lynnfield in Lynnfield, Massachusetts, about 20 minutes north of Boston. The Roots store will be almost 5,000 square feet as part of the popular retail center that spans approximately 300,000 square feet, making it the North Shore’s biggest open-air shopping destination.

Roots currently caters to the U.S. market through its e-commerce site, but only has four retail stores in the country, compared to 116 in Canada and 138 partner-run stores in Taiwan and China. Management is targeting 10-14 new U.S. retail locations by the end of 2019.

Only about 400 shares of ROOT have traded 20 minutes into Wednesday’s session, with shares down seven cents, or 0.53%, at $11.10. The stock is typically thinly traded, as evidenced by a average daily volume across the last three months of only 75,840 shares, according to Yahoo Finance.