Luxury Made in Italy freshers in their stock market debut

“Made in Italy” has been parading on catwalks all over the world for decades, and for some time has also been presenting its collections to the international financial markets. A few days before the opening of Pitti in Florence and the launch

of men’s fashion week in Milan, Ferragamo and Prada, two of the big names in Italian luxury, are getting to grips with their stock market debut: the Florentine house on the Milan stock exchange, but Prada in Hong Kong, thousands of kilometres away from the Milanese headquarters of via Fogazzaro, but on one of the most promising markets for luxury. In recent days, the golden couple of Italian fashion, Miuccia Prada and her husband Patrizio Bertelli, who (together with Miuccia’s siblings, Marina and Alberto) own 95% of the brand, are receiving almost as much media attention as Kate Middleton and Prince William.

Among the other Italian freshers making their stock market debut in 2011, there is also Brunello Cucinelli, the cashmere brand whose listing is scheduled for the autumn. Until the start of June, Moncler was also on the brink of coming to the market but ultimately, its management and the Carlyle Fund (which holds a 48% stake in the brand) allowed themselves to be seduced by the French company, Eurazeo. Having sold 45% for Euro 418 million, Moncler decided to postpone its stock market listing until a date to be defined. Since the majority is now held by a French company (45% Eurazeo, 32% Remo Ruffini, 17.8% Carlyle, 5% Brand Partners 2% and 0.2% Sergio Buongiovanni), it cannot be ruled out that it will take place on the Paris stock exchange.

Hence, it is “Made in Italy”, but with a very strong French accent. According to the French daily, la Tribune, François-Henri Pinault, the owner of Ppr, had been eyeing Prada, for the stake which would remain in the hands of the Bertelli-Prada couple after the listing. For now, the news item has been denied, but since Pinault has already swallowed Gucci, Bottega Veneta and Sergio Rossi, there would be nothing odd about this. Recently, Bulgari (listed since 1995) changed hands and with the French LVMH group’s cash, will be able to open new single brand outlets and enjoy excellent management. Brunello Cucinelli has the same objective through a listing scheduled for the autumn. The Umbria-based group, which ended 2010 with a 28.3% increase in sales to Euro 203 million, has chosen this route in order to acquire international visibility.

Salvatore Ferragamo has slightly different objectives. Despite being one of the first luxury companies to go to China (with more than 90 stores in the country), it chose to list 25% of its share capital in Italy. A more modern structure, high levels of management and the scope for family members to leave the shareholding structure if they wish are among the reasons which have pushed the company towards the stock market. Its debut may take place at the end of June or start of July, although according to Reuters, if market conditions are critical, the global coordinators could advise Ferragamo to wait for a more appropriate moment, probably in the autumn.

Returning to Prada (which also controls Miu Miu, Church and Car Shoe), the first to list this summer, the company will place 423 million shares, equal to 16.5% of the share capital post increase, and shall be ready to collect between US$ 2-2.6 billion from the IPO. The offer will close on 16 June, with the debut on the Hong Kong exchange set for 24 June. According to the Financial Times, the maximum price would value the entire Prada group at 27 times projected 2011 revenues, at a level which would be among the highest multiples in the haute couture sector: the market capitalisation of Burberry is equal to 22.3 times projected 2011 revenues, and that of the French LVMH group, 19.4 times.

From our correspondent in Milan