The Milan-based luxury group is making the last amendments to carry on a share sale in the coming months and Hong Kong is candidate number one for the possible listing. Prada would have a valuation of at least 7.5 billion euros ($10.1 billion) based on current estimates if it sold shares in Hong Kong.
Prada directors will meet Thursday 27th of January to consider the Italian fashion company's first public listing, probably in Hong Kong, an industry source told AFP. “The board meets Thursday and the stock market listing is the order of the day,” said the source, while Prada refused to comment on the possibility of an initial public offering.
Prada, which is controlled by Chief Executive Officer Patrizio Bertelli, his wife Miuccia Prada and her family, will hold this board meeting to review the 2010 accounts before making a final decision on the IPO, said inner sources, who declined to be identified because the matter is private. An announcement could follow as early as February, paving the way for a possible listing in June or July, one of them said.
According to recent press reports, Prada favours a Hong Kong listing which could take place in June or July. The group has been keen to get publicly listed for several years (four times in 11 years), but have held back due to the inclement market conditions. However, last October the fashion powerhouse announced that it had re-opened the dossier and was looking particularly at Hong Kong on top of other possibilities such as Milan or London. Prada is studying a share sale as soon as the first half of 2011, three people familiar with the situation told Bloomberg at that time.
Last estimations point out full-year sales for Prada will be almost 2 billion euros in the fiscal year ending Jan. 31, while earnings before interest, tax, depreciation and amortization will be close to 500 million euros, the people said. Intesa Sanpaolo SpA, UniCredit SpA and Credit Agricole SA are guaranteed a role in any offering as part of loan agreements with Prada, one of the people said. Goldman Sachs Group Inc., which worked on the luxury company’s last IPO attempt in 2008, will likely be rehired, both people said.
Prada, which also owns the Miu Miu, Car Shoe and Church’s brands, would have a valuation of at least 7.5 billion euros ($10.1 billion) based on current estimates if it sold shares in Hong Kong, compared with between 5 billion euros and 6 billion euros in Milan, analysts said.
In the first nine months of 2010, the group's net profits tripled to 156 million euros (211 million dollars), thanks in particular to its growing sales in Asia. While that makes Hong Kong more attractive, Prada may seek to accommodate Italian investors by selling some shares in Milan, the other person said.
The Milan-based company plans to open about 90 stores in 2011 as demand increases, a spokesman said today from Beijing, where the company will host a fashion show this week. Late last year, Prada's deputy chairman Carlo Mazzi, told a Hong Kong newspaper that “If I have to make a decision right now, I will choose Hong Kong. It's likely to become the world's biggest stock market in 10 to 15 years.”
Sales of luxury goods in mainland China totalled $10.3 billion in 2009, up 14 percent from the year before, according to Bain and Company. When purchases by Chinese citizens abroad are factored in, the market was worth $23.7 billion, calculate the industry.