FIGS Inc. (NYSE:FIGS), a publicly traded company known for its medical apparel with a market capitalization of $1.04 billion, has declined an unsolicited acquisition offer from STORY3 Capital Partners (WA:CPAP), LLC.
The company, headquartered in Santa Monica, California, stated today that its Board of Directors, along with a Special Committee of independent directors and advisors, has carefully reviewed the proposal and decided to continue its current business plan independently. According to InvestingPro data, FIGS maintains impressive gross profit margins of nearly 68%, suggesting strong pricing power in its market.
The Board's decision reflects their belief in the company’s future prospects and the strength of its standalone strategy. FIGS Inc., which trades on the New York Stock Exchange under the ticker NYSE:FIGS, communicated its position to STORY3 through a formal letter dated January 16, 2025.
This development comes amid a backdrop of increasing consolidation in the apparel industry, with companies looking to expand their market share through strategic acquisitions. However, FIGS Inc. has chosen to maintain its course, emphasizing the potential for organic growth and value creation for its shareholders.
The company's response to the acquisition proposal is a significant decision, as it underscores FIGS Inc.'s commitment to its long-term business objectives and confidence in its ability to compete as an independent entity in the apparel market.
Currently trading at a P/E ratio of 95.7 and near its 52-week high, FIGS maintains a "GOOD" financial health score according to InvestingPro, which offers comprehensive analysis and 12 additional key insights about the company's valuation and prospects through its Pro Research Report.
In other recent news, FIGS Inc. disclosed a Binding Term Sheet agreement with Baron Capital Management and BAMCO, setting new shareholder terms.
This agreement outlines a framework for a forthcoming stockholders agreement, imposing restrictions on Baron's activities as a major shareholder. In parallel, FIGS reported Q3 results with a 17% growth, but a net revenue decrease of 2% to $140.2 million and a net loss of $1.7 million, leading to a revision of its 2024 revenue outlook. Additionally, Applied Fundamental Research, a long-term shareholder, recommended FIGS to articulate investment priorities and manage excess cash through share repurchases.
These recent developments also include FIGS' international expansion into 33 countries and a $25 million investment in a new company, OOG. Despite these challenging times, FIGS maintains a strong balance sheet with $281.7 million in cash and no debt.
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