Jos. A. Bank Clothiers Inc., the Hampstead retailer that was near bankruptcy four years ago, took another major step in its rehabilitation yesterday when its stock started selling on the Nasdaq electronic trading system.
Bank's stock traded yesterday between $10 and $10.75. It closed at $10. Approximately 1.17 million shares changed hands.
The company's investment banker, Donaldson, Lufkin & Jenrette, had priced the shares at $10 apiece on Monday.
Bank had hoped to get substantially more. In registration papers filed with the Securities and Exchange Commission, the retailer said it expected its stock to fetch between $13 and $15.
Company officials declined to comment on the price change. But securities analysts said the climate for initial public offerings like Bank's has cooled recently.
Because of the stock market's decline this year, mutual funds that invest in small companies have fewer dollars flowing into them, analysts said.
Investors generally are less willing to pay high stock prices for the promise of future earnings growth.
The price decline will cut Bank's anticipated proceeds from the stock sale by more than $5 million.
The company is selling 2 million newly issued shares, which at $10 will generate $20 million minus underwriting costs. In addition, insiders are selling 1 million shares of their own.
Chairman Timothy F. Finley said yesterday that the price change won't affect Bank's expansion plans. The company intends to use much of its new capital to add 58 stores in the next four years to the 61 it already has.
"We were conservative" in figuring how much stock to sell to finance the expansion, Mr. Finley said. "We're moving ahead."
Bank has come a long way. Burdened by a leveraged buyout and merchandising problems, it lost $48 million in fiscal 1989 and $7.4 million in fiscal 1990.
It has since restructured its capital and refocused its catalog and store lines on its traditional strength, tailored clothing.
The company earned $3.8 million last year on sales of about $147 million.