CEO Liz Muñoz on Torrid Going Public and Positioned for Growth

In the burgeoning $85 billion market for plus sizes, Torrid is one brand that’s turning up the heat.

Torrid begins trading on the New York Stock Exchange today, issuing 11 million shares of common stock with an opening price of $21 a share under the ticker symbol “Curv.” This is the first time that the Sycamore Partners private equity firm has taken public one of the brands within its extensive portfolio of retail holdings, through an initial public offering.

Along with The City of Industry, Calif.-based Torrid, Sycamore’s portfolio contains Azamara, Belk, CommerceHub, Express, Hot Topic, Loft, Ann Taylor, Lane Bryant, MGF Sourcing, NBG Home, Pure Fishing, Staples in the U.S. and Canada, Talbots and The Limited.

Following the offering, Sycamore will control about 78.5 percent of the voting power of outstanding common stock, and the money raised through the IPO will be returned to the selling shareholders, rather than fed into Torrid. The selling shareholders have granted the underwriters a 30-day option to buy an additional 1.65 million shares of common stock at the initial public offering price, less the underwriting discount and commissions.

“The most important reason for the IPO is that Torrid is ready. The brand is at scale, and it is a marketing moment for the brand to get out there,” Liz Muñoz, Torrid’s chief executive officer, told WWD. “I am hopeful this will help us get our name out there. Sycamore has been a great partner. They’ve had us for eight years. It will be very orderly.”

But as with any public company, there’s now increased pressure to grow the business, quarter by quarter. Addressing the challenge, Muñoz told WWD, “We only have 3.4 million of the 91 million potential customers in America and only 31 percent brand awareness. So our single biggest opportunity is to go after finding customers and now we have this digital opportunity. We are using an influencer strategy and a micro influencer strategy. We are going after social media and SEO and all of those things. So bringing new customers to the brand is the single biggest opportunity.”

Torrid Curve, the intimates brands that also includes activewear, loungewear and sleepwear, is the second most significant growth opportunity, for two reasons, Muñoz said. “It’s incremental, which means it doesn’t necessarily compete with anything else we are offering, and it’s really important for her to be completing her wardrobe and having us be one-stop shopping. The category of product that brings the most new customers to Torrid is a bra, second only behind tops, which I find fascinating because if I were a big girl just wandering onto somebody’s website, a bra would not be where I would start because those are just so hard to get right. A customer that buys a bra in the first 12 months with us is three times more valuable to us than one that doesn’t. It’s a good sticky category.”

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During an interview three days before the IPO, Muñoz discussed what makes Torrid an attractive investment, distinctive, and poised for growth. She said Torrid has an outsized e-commerce business — the company identifies itself as a direct-to-consumer business rather than a specialty retailer — representing 70 percent of total volume last year, compared to 54 percent in 2019. She expects it to level off at 65 to 70 percent long term, a level that the company is satisfied with.

“Plus sizes customers were on e-commerce before everyone else got the memo,” Muñoz said. With that high rate of e-commerce shopping, Torrid has only a 9 percent e-commerce return rate, compared to the industry average of 30 percent.

Among the CEO’s other observations:

• Torrid focuses on getting the fit right for its target customer, 25-to-40-year-old curvy women, wearing sizes 10 to 30, and on average, size 18.

• American women are getting larger, currently averaging 165 to 170 pounds.

• The plus-size market remains underserved with apparel and accessories characterized by poor fit, plain styling and limited selection, and plus size women would spend more on clothing given more options.

• Torrid offers a broad spectrum of product from bras to blue jeans, workwear, sleepwear, loungewear, wedding dresses, active, footwear, tops, accessories, knits and swim.

• Torrid’s business is not seasonal.

“We do not rely on a giant holiday,” Muñoz explained. “It is a buy for yourself for the most part or someone very close to you. Most people don’t look at a 300 pound girl and say, ‘I’m going to buy her a dress.’ It’s a lot to ask. We are essentially 25-25-25-25 [through the quarters] and honestly, we like that. We don’t have to wait until the last few weeks of the year to know whether we had a good year or not.”

She believes that with attitudes toward inclusivity, diversity and self love evolving, women feel differently about themselves and are willing to celebrate themselves, and that’s good for Torrid. “There are so many big women now and there is lot less shame attached to it than there was in the ’80s, ’90s or whenever,” said Muñoz, a plus-size woman herself, at 204 pounds and 5 feet, 4 1/2 inches tall.

Sometimes it takes a plus-size woman to know a plus-size woman. “I think women are embracing themselves more and not fighting the fight as much as they used to,” Muñoz said. “We have been shaming women for being fat for years and they haven’t gotten any thinner. I don’t know that shaming and not giving them clothing is the answer to make them thin.

“I have felt shame and I have not had clothing to wear and I am still a big girl,” Muñoz added. “I remember walking into Lane Bryant and looking around the mall and making sure nobody saw me. We have evolved out of that. But the other thing is a lot of women have anxiety about going into stores because they have been disappointed so often. You know it’s not going to work out. You know you are not going to find the outfit you need…At the Macy’s at the mall where I live, plus size is on the third floor between the luggage and the dishes. There is a little corner of clothing which is where they think I should shop.

“People are saying, ‘What do plus-size women want?’ like it’s such a gigantic mystery. Honestly, I don’t know why this is such a conundrum. You know what we want — what everyone else has. You know what I want to wear, what everyone else wears. It’s not that complicated.

“But you have to nail fit. Fit has to work. It’s table stakes. And that’s where so many people [plus-size businesses] go wrong.”

Muñoz holds up photos of two shorts in the same style but with different fits. One fits smoothly; the other shows folds of fat over the pelvic area. “It’s not necessary. If you do the work, you can make it fit great.”

There’s a tailoring-like approach as Torrid does not rely on mannequins during the fit process, but rather fits products on full-time, plus-size fit models as well as on staff and often some of the most loyal customers. There’s an avoidance of simply “grading up” non plus-size apparel. Each year, there’s testing, measuring and cataloging of over 13,000 garments on fit models, and Torrid seeks steady customer feedback. Internally designed and developed products represented 89 percent of sales in 2020.

“The game changer for us is when we said fit matters most, we meant it,” said Muñoz. “I have a fitting background. That’s what I did at Lucky Brand. When I left I was president but I was intimately involved with fit. I was a pattern maker in the ’80s at Bongo jeans. That was my first gig.”

Soon after Muñoz joined Torrid in 2010 as senior vice president of product, before rising to president in January 2018 and CEO in August 2018, “I went into the fit room and spent three and a half years with our techs, only fitting. I did fit eight hours a day, five days a week, 140 garments a day over three and a half years. We emerged from there having built blocks, standards. We made mistakes. We learned a lot. We learned to break rules. We documented it all and we built an arsenal of fit that would service this brand for decades to come. And then we did something I think is one of the biggest frustrations, not just with plus [brands] but with everyone in this industry: We made sure those fits don’t change. I don’t know how many times when you go back to buy a shirt again, the fit is different, and that’s because merchants can change fit whenever they want at most companies. At Torrid, you need an affidavit and a letter from God to change a fit. Nobody changes our fit.

“We try not to change sourcing. We build long-term relationships that are factory direct because it takes a long time for a vendor to get up to speed. We are unrelenting. We check everything.”

In addition, there’s that slimming affect. “I am a big girl, but this T-shirt I’m wearing makes me look thinner,” Muñoz said. “Our product comes close to the body. It’s shaping. There is a lot of fabric stretch, but the products are very, very slimming. This is something we focus a lot of energy on.


Asked what products are selling best lately, Muñoz singled out a recently introduced wire-free bra, knits, and denim, which she described as “an outsized business just because we are so good at bottoms… I would also say we have really great bralettes. I have one bralet we spent two years engineering. We were selling real bras during COVID-19 and the wire-free bra was a big success because it’s a super comfortable bra that fits like a real bra.” To develop much of its intimates assortments, particularly bras, Torrid taps Sycamore’s sourcing arm called MGF, as well as other vendors.

On the brick-and-mortar front, the 608-unit Torrid chain is considering adding a couple of dozen or so stores annually for the next few years. Stores average 3,000 square feet.

“Our model is not dependent on store openings, but we love stores,” Muñoz said. “What’s different about Torrid with e-commerce and stores is so often stores feel like they are competing with e-com and they fight over the sale. Our stores are not a singular place of commerce. They are more than that. They are a place of community, a return center, a place of discovery, and there’s the fit room experience, and what happens there.” Associates are taught, “When you get a customer, don’t get myopic and focus on just needing to sell them something. Yes, sell her that top, but if she is willing and has time, get her in the fit room. Have her try things on. Don’t get caught up on whether she can buy it all at that moment, because once she has that experience, she will continue to shop online and we are good with that.”

A Torrid store in the Irvine Spectrum Center in California. 

According to the IPO prospectus, Torrid is adding personalization to its mobile app, and investing in omnichannel offerings such as curbside pickup, BOPIS and ship from store.

Last year the company — which considers Lane Bryant, Eloquii, Target, ThirdLove and Old Navy as top competitors — generated net sales of $974 million, compared to $1.04 billion in 2019. It’s grown comparable sales for 35 of the last 37 quarters; the only two quarters of decline were in 2020 as a result of COVID-19.

In 2020, net income declined 41 percent to $25 million. In 2019, net income declined 52 percent to $42 million from $87 million in 2018. Asked about that 2019 slip, Muñoz explained, “Torrid grew very quickly, year over year over year. When a company grows like that, sometimes you skip key steps. Inventory discipline was something we did not get our heads around, because we were always chasing product. We had an inventory issue. We had a writedown. We brought in management,” including a chief operating officer that implemented core disciplines, targets, reduced sku’s by 20 percent, and controlled sku proliferation, Muñoz said.

Adjusted EBITDA grew 36 percent from $97 million in 2018 to $132 million in 2019. In 2020, adjusted EBITDA declined 24 percent to $101 million driven by temporarily lower gross profit margin and fixed cost deleverage as a result of the challenges presented by COVID-19. The company has $202 million in debt.

Stefan Kaluzny, Sycamore’s managing director and cofounder, said in a statement that Sycamore “worked closely with Torrid management to help transform Torrid from a retailer with 20 percent e-commerce penetration prior to our acquisition in 2013, to a leading direct-to-consumer brand with 70 percent e-commerce penetration, representing nearly $800 million in sales transacted online, and sales growth of 25 percent per year since our acquisition. We look forward to continuing our partnership with the team at Torrid as they embark on this next chapter of growth and success as a public company.”

Torrid swimwear. SPRING 4 SHOOT (DOLPHIN HOUSE);


2001: Hot Topic, then a public company, launches Torrid.

2012: Torrid net sales approach $200 million, with 20 percent occurring online.

2013: Sycamore Partners acquires Hot Topic.

2015: Sycamore spins off Torrid from Hot Topic as a separate privately held company.

2018: Liz Muñoz rises first to president, then CEO.

2021: Torrid becomes a publicly listed company on the NYSE, trading under the symbol “CURV.”


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