The beloved Italian fashion group Prada announced last month that it will be moving forward with plans for an initial public offering in Hong Kong, according to the New York Times. If the move is successful, Prada will be the first European luxury group and the only Italian company to list in Hong Kong, reports the New York Times.
Prada tried to come to market several times in the past including the company’s first attempt after the Sept.11, 2001 terrorist attacks; however each time the company canceled plans due to unfavorable market conditions. This time around Prada could raise around 1.2 billion euros and “seek a valuation of at least 12 times projected 2011 core earnings,” according to Reuters.
Why does Prada need the initial public offering? A Prada spokesman told the New York Times that the company requires the money to fund Prada’s expansion. Although the details were not announced, Prada has been rapidly spreading its brand and opening stores around the world, including Asia, where millions of affluent consumers have been devouring the luxury products. The Italian company sells Prada shoes, handbags, clothing and accessories. The Italian group also owns other brands such as Miu Miu and Church’s.
Prada is not the only foreign company to list in Hong Kong instead of their home markets. Reuters reports that companies such as French skincare chain L’Occitane International SA joined Hong Kong’s bourse last year. The Wall Street Journal reports that bankers see the Italian group as a “door-opener for the luxury-goods sector.”