Coach Aims for Hong Kong Listing

Coach Inc. said it plans a secondary listing of its shares in Hong Kong by year’s end, the latest luxury brand seeking to use a presence on the local exchange to boost its profile among China’s fast-growing affluent class. Coach’s shares are already traded on the New York Stock Exchange, and it doesn’t plan to raise extra capital via the issuance of Hong Kong depositary receipts, underscoring that the exercise is more about marketing than finance.

“This listing, if approved, will raise awareness of the Coach brand among investors and consumers in the China market as well as throughout Asia,” said Lew Frankfort, Coach’s chairman and chief executive officer. Coach markets accessories and gifts for women and men, including handbags, business cases, footwear and watches. The company intends to file a listing application with the Hong Kong stock exchange, which, if approved, will mean it can list before the end of 2011. Based on this timing, Coach is likely to be the first U.S. domestic issuer to do a secondary listing in Hong Kong.

Other internationally recognized brands are flocking to Hong Kong with the same goal in mind. Italian fashion house Prada SpA and U.S. luggage maker Samsonite are pushing ahead with plans for a primary listing in Hong Kong in the coming months. For luxury-goods makers in particular, Asia represents an important area of growth. Coach said about a quarter of its sales come from Asia. For the 12 months ended April 2, the company’s global sales totaled just under $4 billion, a spokesperson said. Foreign resource companies are seeking a presence in Hong Kong, too. Swiss commodities trader Glencore International AG is in the process of marketing shares to investors ahead of a planned dual listing in London and Hong Kong.

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