ODEL invites the public to share in its success

* IPO of 16.7 million shares opens 5th July

* 11.5% of equity to be offered

A rare opportunity presents itself for the public to share in the runaway success of a premium lifestyle brand when ODEL Limited formally opens its initial public offer on Monday 5th July, becoming Sri Lanka’s first fashion retailer to go public.

Seeking to raise Rs. 250.5 million for expansion, Sri Lanka’s definitive lifestyle retail brand is offering employees and members of the public an 11.52 per cent stake in its equity, with an offer of 16.7 million shares at Rs 15 each.

Coming almost 20 years to the day that ODEL’s first store opened at Dickman’s Road, Colombo 5, the IPO will broad base ownership of a privately held business that has grown exponentially over the years, increasing its retail space from 400 square feet to 128,000 square feet; amassing assets of Rs. 2,348 million and achieving a near five-fold growth in net profit over the past five years.

A brand that has retained its aspirational aura even after growing to 12 stores and 700 plus employees and achieving ‘household-name’ status, ODEL is seeking to expand further in the anticipated post-conflict resurgence of Sri Lanka to make its unique offering accessible to a larger segment of the population with new strategically-located stores and improvements to its existing stores and facilities.

Presenting its IPO Prospectus to the media on Tuesday, 22nd June, the company said its expansion programme includes new branches and business infrastructure development, with new branch locations to be finalised after market surveys and feasibility studies and identifying favourable sites.

“Given its well-established and recognised brand equity, the Company believes that its store expansion plan will contribute swiftly to boosting Company revenues and profitability,” the Prospectus said.

The 15.7 million offered shares are to be distributed among three broad investor categories – Employees (1.2 million shares), Retail investors (3.0 million shares) and ‘Non-Retail’ investors (12.5 million shares).

Applications can be made for a minimum of 100 shares (Rs. 1,500) or in multiples of 100, and for the purpose of allotment, public applications for up to 5,000 shares will be categorized as ‘Retail,’ and applications for larger blocks as ‘Non-Retail’ so as to minimize the chance of smaller investors being crowded out.

Subsequent to the lPO, the entirety of ODEL’s 144,950,000 issued and paid up shares will be listed on the Diri Savi Board of the Colombo Stock Exchange.

Addressing journalists, Ms. Gunewardene, who started ODEL’s phenomenal journey by selling export-surplus apparel from the boot of her station wagon more than two decades ago, described the IPO as a milestone of corporate and personal significance. “There hasn’t been a single dull moment for me or for ODEL since inception,” she said. “ODEL may have happened quite by accident. But what followed in the subsequent decades was far from accidental.”

“We made a determined effort at unlocking ways to indulge each customer, and creativity across the world provided a muse for our eclectic brand. But mostly, it was our own imagination that inspired us, the imagination of a team, who like me, wakes up each morning challenging our boundaries. I believe that is what makes us distinctly different from the rest. It is this incredible energy, and our understanding of what our customers want, is what will help us drive ODEL into the world of possibilities that the IPO is opening up for us,” Ms. Gunewardene said.

Now comprising 12 stores and with its latest store in Battaramulla poised to open in July, ODEL is well positioned to ride the wave of optimism and growth as Sri Lanka’s economy grows in the post-conflict area. The company is set to benefit from higher levels of domestic consumption activity amid fast- improving macroeconomic conditions that are expected to contribute to rising disposable income levels in the country.

ODEL is also synonymous with tourists for shopping in Sri Lanka, and the company’s centrally-located flagship store is one of the most sought-after tourist shopping destinations in the island. With the conclusion of the 26-year separatist insurgency last year, tourist arrivals to Sri Lanka are expected to surge to record highs, and ODEL is set to capitalize on this opportunity as an internationally recognized fashion brand among tourists to Sri Lanka.

In addition to building the brand equity of ODEL over the years, Ms. Gunewardene has also created several other related brands, including ‘Backstage’ for an extensive range of fashion accessories and ‘Embark’ for a cause-linked product range that supports a personal community programme focused on the welfare of community animals.

The Board of Directors of ODEL Limited comprises Ruchi Gunewardene (Chairman), Otara Gunewardene (CEO), Paul Topping, Sanjay Kulatunga and Eardley Perera.