Prada's $2 billion initial public offering was approved last night at a meeting with Hong Kong Stock Exchange (HKEx) regulators. Sources tell Bloomberg that the Italian fashion house will go public on June 24, though that's still a "tentative date."
Prada isn't the first latest luxury goods company to pursue a Hong Kong IPO. British shoe company Jimmy Choo is also exploring a stock sale, as is Coach. Last year, French cosmetics company L’Occitane's IPO raised $708 million, with shares selling at $15.08, the top end of the marketing range. Today, the stock trades at $20.15. The appeal is spreading to other more mainstream consumer brands. American luggage giant Samsonite is currently pre-marketing $1 billion IPO, with the hope of being listed by June. There are a few reasons why HKEx has become this season's hottest accesorry.
Hong Kong's IPO market is booming
The Wall Street Journal notes Hong Kong was "the world's biggest IPO market last year, with US$57.7 billion raised from 87 listings." An added bonus for European companies like L'Occitane and Prada and Jimmy Choo, as the Journal also notes, is that "Asia, particularly Hong Kong, trades at a premium to Europe." If you're still not convinced, the Chinese government is willing to prop up your IPO. A Bloomberg report on the L'Occitaine deal notes that "China Investment Corp., the nation’s sovereign wealth fund, agreed to buy $50 million worth of shares in the IPO."