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IPO values Prada at up to £9bn

UPDATED: Prada’s planned Hong Kong stock exchange listing could see the company valued at up to £9.3bn, making it one of the most valuable luxury goods groups in the world.

The company is hoping to raise up to €2.1bn (£1.9bn) from the IPO.It started meetings with potential investors yesterday (June 6) after setting a price range of HK$36.50 (£2.85) to HK$48 (£3.75) per share, which values the company at a maximum of 27 times earnings. The final IPO price will be announced on June 17 and shares are expected to start trading on June 24.

It’s decision to use the Hong Kong stock market, rather than London or New York, is being seen as recognition of the importance of Asian customers to the luxury market, and cash raised from Prada’s IPO could see it embark on an aggressive store opening program focussing on growth in the region.

A 450 page filing was released on Friday via the Hong Kong stock exchange website ahead of the fashion house selling off 16.5% of its share capital in an IPO this month.

The document said that proceeds from the stock market listing will help Prada open 80 directly operated stores this year, with 25 situated in Asia. The company has 319 boutiques worldwide. Other goals for the company include strengthening its global coverage, capturing the “high growth potential” of luxury label Miu Miu and improving margins and profits.

The document listed several “risk factors” for the business including the global economy, fast fashion brands impacting the speed of the fashion development cycle and counterfeiting.

The filing also reported that creative director Miuccia Prada earned €9.7m (£8.6m) last year and her husband and Prada chief executive Patrizio Bertelli earned €10m (£8.9m). Each own 33.2% stakes in Prada.

Prada said it expected consolidated profit for the six months ended July 31 to be about €150.7m (£134.2m).

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