Shake Shack Announces IPO, International Expansion
New York gourmet burger chain Shake Shack filed papers to go public on Monday and is planning a massive expansion from 36 to about 450 stores in the United States, the New York Post reported.
The company has yet to determine exactly what amount it intends to raise through the issuance of shares, but its plans also include expanding internationally. It currently operates 27 locations outside the country.
"We open Shacks in areas where communities gather, often with high foot traffic and substantial commercial density such as New York City's Theater District, London's Covent Garden and Dubai's Mall of the Emirates," Shake Shack said in filings with the Securities and Exchange Commission.
"We will continue to not only fill in existing markets such as New York, Boston, Philadelphia, Washington, D.C., Atlanta, Chicago and South Florida to leverage operational effectiveness as we cluster in high-density markets," it added, "but also enter new markets, such as Austin, where we have signed leases."
Today, Shake Shack operates 63 locations between its U.S. and foreign operations, according to CNBC. In the fiscal year ending Dec. 25, 2013, its revenue totaled $82.5 million, up $25 million since the 2012 fiscal year, according to regulatory filing.
Fortune called the leadup to the coming IPO a "feast of interesting tidbits about the restaurant chain's growth, strategy, and risks." The magazine reminded potential investors that Shake Shack is still much smaller than fast-food rivals such as McDonald's, has taken its time expanding, and relies heavily on its hometown New York market.
It menu has remained "fairly consistent," Fortune noted, and the company "is well positioned to handle any potential disruptions to supply. But as it looks to expand abroad, unique challenges await, and Shake Shack "has had some issues supplying its international locations," the magazine added.
JP Morgan Securities and Morgan Stanley are among the lead underwriters for the proposed offering by the company "famous for its frozen custards and hamburgers," CNBC said. According to the business channel, Shake Shack plans to raise about $100 million.
The first Shake Shack opened in 2001 and evolved from a hot dog cart in a New York City park, CNBC recalled.
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