The fall season could see an uptick in company IPOs, but there is little guarantee that favorable market conditions will last long enough for Prada SpA to capitalize on the current IPO cycle. Shein is also said to be considering an IPO in the US
Prada is believed to be trying to raise $1 billion from a second listing in Milan to complement its listing on the Hong Kong Stock Exchange, where it raised $2.1 billion in 2011, as a luxury from the Asian demand for premium fashion benefited. Things are a little different today, from China’s waves of Covid lockdowns to saber-rattling over Taiwan.
Companies often seek a listing outside of their “home market” in order to raise funds from a new investor base or perhaps to use the new stock as currency for a share swap in an acquisition.
The problem, however, is that the planned listing in Milan won’t happen until next year, according to Bloomberg, which first reported on Prada’s plans on Friday. She quoted Prada chairman Paolo Zannoni as saying in July that a double listing was always on the table in Milan, although it was not a priority. Prada is said to have chosen Goldman Sachs as its banker.
Miuccia Prada, co-CEO of the brand, and her husband Patrizio Bertelli own 80 percent of the shares in the Italian luxury house. It wasn’t immediately clear what their stake would be after an Italian listing, although they may not have to sell shares if they seek a side listing.
Prada executives could not be reached for comment. A spokesman for Goldman Sachs declined to comment.
IPO tracker Renaissance Capital said on Sunday the Milan IPO market could be warming up as auto parts maker Euro Group has also picked banks for an Italian IPO expected next year.
IPOs outside of the US have kept investors busy this year. Renaissance said IPOs in the Middle East have met with “consistent interest” as Gulf-based fast-food franchiser Alamar Foods rose 6 percent in its first day of trading and Saudi bottled water Naqi Water started trading earlier this week begins.
In China, seven A-shares were listed last week, including top-performing circuit board maker Ji’an Mankun Technology, which rose 67 percent on its debut. “IPOs in mainland China have raised over $48 billion so far this year, accounting for over 50 percent of global proceeds,” Renaissance said. And the world’s largest duty-free retailer, CTG Duty Free, plans to raise more than $2 billion in a Hong Kong cross-listing. Prices are expected on August 18, with trading set to begin the following week.
Although the Securities and Exchange Board of India has suspended its IPO approval process for ethnic apparel label Biba Fashion, it looks like textile and apparel company Veekayem Fashion and Apparels Ltd. will list its shares on August 22 on small and medium-sized companies platform of National Stock Exchange of India, Ltd.
In the US, the fall market could heat up after AIG spin-off Corebridge Financial lists on the New York Stock Exchange next month.
And with all the oozing activity on the IPO front, could fast-fashion giant Shein reconsider its IPO plans?
TikTok’s most talked about branded fashion company was gearing up for a listing this fall in New York. But after Russia’s attack on Ukraine and the ensuing chaos that shook financial markets, the IPO plan was scrapped.
Instead, Shein shifted gears and began negotiations for a round of funding with private equity firms, similar to Authentic Brands Group’s decision last year to skip an IPO and attract new investors.
The fast fashion firm has been plagued by selling goods laden with toxic chemicals, not to mention workers who are reportedly toiling in abusive conditions. But sources said Shein still has a $100 billion valuation in mind. And one way for the suspected Stussy copycat to get there would be through an IPO, which sources say would likely happen in New York in 2024. To do that, it may need to position itself as a company that can be a force for social good, which could explain why Shein recently hired Adam Whinston to lead its burgeoning ESG efforts.
Shein is using the time to “green” itself, a necessary step if it wants to be a player in the public company world and attract investors. His latest initiative is a $50 million contribution to an expanded Producer Responsibility Fund to help communities affected by textile waste.
Shein could not be reached for comment as of press time.
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