{"id":9410,"date":"2011-06-24T04:06:38","date_gmt":"2011-06-24T04:06:38","guid":{"rendered":""},"modified":"2025-10-15T11:01:52","modified_gmt":"2025-10-15T11:01:52","slug":"prada-makes-lackluster-ipo-debut","status":"publish","type":"post","link":"https:\/\/asiancemagazine.com\/?p=9410","title":{"rendered":"Prada makes lackluster IPO debut"},"content":{"rendered":"

Italian luxury fashion house Prada made a lackluster stock market debut in Hong Kong <\/strong>this morning amid choppy global markets and waning investor interest after a string of blockbuster IPOs.<\/p>\n

The family-controlled firm’s stock opened just 0.25 per cent higher at HK$39.60 (US$5.08) compared to its initial public offering (IPO) price of HK$39.50.<\/p>\n

Prada shares were trading at HK$40.00 shortly after the opening, while Hong Kong’s benchmark Hang Seng index opened 0.39 per cent higher on Friday.<\/p>\n

“We are the first Italian luxury brand company to list here<\/strong> and this is a landmark event for the Hong Kong stock exchange,” chief executive Patrizio Bertelli told reporters.<\/p>\n

“I am positive the Greater China market will be an interesting market for luxury good brands. The first signs are very good,” he said.<\/p>\n

The Italian group, which includes the Prada, Miu Miu, Church’s and Car Shoe brands<\/strong>, is the latest high-end fashion brand to tap the huge Chinese market, the world’s fastest-growing market for luxury goods.<\/p>\n

China is forecast to be the world’s top buyer of products such as cosmetics, handbags, watches, shoes and clothes by 2015<\/strong>, according to consultancy PriceWaterhouseCoopers.<\/p>\n

But weak market sentiment pushed Prada to price its Hong Kong shares at the lower end of its price range and shrink the size of its highly anticipated IPO, raising a lower-than-expected US$2.14 billion.<\/p>\n

Prada sold 423.2 million shares after floating 20 per cent of its stock. Before the IPO, the brand had been 95 per cent owned by the Prada family and executives.<\/p>\n

The top end of Prada’s price range would have seen the firm raise about US$2.6 billion in Hong Kong, before any option to issue extra shares which could have pushed the deal to US$3.0 billion in all.<\/p>\n

But analysts said many investors were concerned that Prada’s stock was overpriced, and were deterred by a tax hurdle in Italy that could shrink foreigners’ profit owing to the absence of a tax treaty with Hong Kong.<\/p>\n

China’s deep capital pool helped Hong Kong claim the title of the world’s biggest IPO market in 2010 — for the second year in a row.<\/p>\n

Firms raised more than US$50 billion in Hong Kong IPOs last year, making it the world’s biggest market for new listings including two monster sales by Asian insurer AIA and Agricultural Bank of China.<\/p>\n

Luggage maker Samsonite had a poor trading debut in Hong Kong last week<\/strong> with its shares closing nearly eight percent below their IPO price.<\/p>\n

And Prada received some unwanted publicity on Thursday when two dozen women’s rights activists staged a protest outside one of its Hong Kong stores, accusing the group of sexual discrimination and chanting “The Devil is Prada! No listing of Prada!”
\n<\/strong>
\nThe protest stemmed from the case of Rina Bovrisse, a former Prada manager in Japan who claimed she was unfairly fired in March last year after being told by a company executive that she was “ugly” and didn’t have “the Prada look”.<\/p>\n

Source AFP<\/em>
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