The fall season could see an uptick in companies going public, but there’s little guarantee that any favorable conditions in the market will last long enough for Prada SpA to take advantage of the current IPO cycle. Shein is also said to be mulling a public offering in the U.S.
Prada is believed to be looking to raise $1 billion from a second listing in Milan to complement its Hong Kong Stock Exchange listing, where it raised $2.1 billion back in 2011 when luxury was cashing in on the Asian demand for premium fashion. Things are a bit different today, from China’s waves of Covid lockdowns to saber rattling over Taiwan.
Companies often pursue a listing beyond their “home” market to raise funds from a new investor base, or potentially to use the new shares as currency in a stock swap as part of an acquisition.
But the problem is that the planned listing in Milan won’t be until next year, according to Bloomberg, which first reported on Prada’s plans on Friday. It cited Prada chairman Paolo Zannoni as saying in July that a dual listing in Milan was always on the table, even though it is not a priority. Prada is said to have selected Goldman Sachs as its banker.
Miuccia Prada, the brand’s co-CEO, and her husband Patrizio Bertelli hold an 80 percent stake in the Italian luxury house. It wasn’t immediately clear what their stake would be following an Italian listing, although they might not have to sell any shares if they pursue a cross listing.
Executives at Prada could not be reached for comment. A spokesperson for Goldman Sachs declined comment.
IPO tracker Renaissance Capital said on Sunday that Milan’s IPO market could be heating up as motor parts maker Euro Group has also picked banks for an Italian IPO expected next year.
IPOs outside the U.S. kept investors on their toes this year. Renaissance said Middle East IPOs have been met with “steady interest,” as Gulf fast food franchiser Alamar Foods rose 6 percent on its first day of trading and Saudi bottled water Naqi Water begins trading early this week.
China saw seven A-shares listed last week, including top performer circuit board maker Ji’an Mankun Technology, up 67 percent on its debut. “IPOs in Mainland China have raised over $48 billion so far this years, counting 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 cross-listing in Hong Kong. Pricing is expected on Aug. 18, with trading set to begin the following week.
Although the Securities and Exchange Board of India paused its IPO approval process for ethnic wear label Biba Fashion, it looks like textiles and apparel manufacturing firm Veekayem Fashion and Apparels Ltd. is slated to list its shares on Aug. 22 on the small and medium sized platform of the National Stock Exchange of India, Ltd.
In the U.S., the fall market could heat up after AIG spinoff Corebridge Financial lists next month on the New York Stock Exchange.
And with all the percolating activity on the IPO front, could fast-fashion giant Shein rethink its public offering plans?
TikTok’s most-buzzed-about brand fashion firm had been readying for a public listing this fall in New York. But it scrapped IPO plan in the wake of Russia’s attack on Ukraine and the ensuing chaos that rocked the financial markets.
Shein instead switched gears and began negotiating a financing round with private equity firms, not unlike Authentic Brands Group‘s decision last year to skip an IPO and bring on new investors.
The fast-fashion firm has been plagued by selling goods ladened with toxic chemicals, not to mention workers who reportedly toil in sweatshop-like conditions. But sources said Shein still has its heart set on a $100 billion valuation. And one way for the alleged Stussy copycat to get there would be an IPO, which sources said would likely happen in 2024 in New York. To do that, it might need to angle itself as a company that can be a force for social good, which might explain why Shein hired recently Adam Whinston to head up its budding ESG efforts.
Shein is using the time to “green” itself, a necessary move if it wants to be a player in the public company world and attract investors. Its latest effort is a $50 million contribution to an extended producer responsibility fund to help communities impacted by textile waste.
Shein could not be reached for comment by press time.