HONG KONG — During a fittingly East-meets-West afternoon tea complete with Chinese dim sum and Italian pastries, Prada on Sunday outlined the financial details of its long-awaited initial public offering, which could raise as much as $2.61 billion.
Executives from the company’s board spoke by video conference from Milan and only took a handful of questions from the journalists assembled at the Shangri-La hotel here.
The shares will be priced between 36.50 and 48 Hong Kong dollars each, or $4.69 and $6.17 at current exchange, in line with expectations and previous reports. The company will sell 423.3 million shares, or nearly 17 percent of its capital. If the IPO is priced at the top end of that range, the company would raise as much as 20.32 billion Hong Kong dollars, or $2.61 billion.
The final share price will be determined on June 17 and the stock will start trading on the exchange June 24 under the stock symbol 1913 — a nod to the year of the company’s founding.
“Our decision to go public in Hong Kong shows our interest in Asia today and in Asia as it will be in the future,” said Prada chief executive officer Patrizio Bertelli, flanked by members of his management team. “I’m confident we’ve made the right decision.”
Last week and this week, the company is holding road show presentations in Singapore, Hong Kong, London, Milan and New York. But the real buzz has been in Hong Kong, where Prada billboards are ubiquitous and the entire town is talking about the year’s most luxurious IPO. Bertelli pointed out that Prada is the first luxury fashion brand and the first Italian company to go public in Hong Kong. But even that prospect might not be enough to offset what some observers consider a high asking price.
At the top of the price range, the offer values the company at $15.8 billion. That is about 28 times Prada’s 2011 expected net profit of 400 million euros, or about $574 million. When asked about the logic behind such a high price, Prada vice president Carlo Mazzi brushed aside any potential concerns.
“We’re not worried, we’re just tired from the road show.” he quipped. “The price reflects the value of the company. As for speculation that it’s expensive, we don’t comment, but we don’t share this opinion. The market can decide if it’s a fair price.”
As reporters delved into details, Bertelli bristled at questions about remuneration, specifically a revelation that creative director and group president Miuccia Prada earned 9.7 million euros, or $13.9 million, and Bertelli himself pocketed 10 million euros, or $14.3 million, for their work last year.
As Bertelli began to reply, Mazzi pointed out that these are the heads of design and business for a major corporation.
“You can consider and compare to other companies in the luxury sector,” he interjected. “These compensations are in line with others. There is no problem regarding this point. At the end of the day, it’s paid by the company and the results of the company’s [performance] are what you can see.”
Still, the figures from two of the industry’s biggest publicly listed companies tell a different story, as Prada and Bertelli were each paid more than double what either LVMH Moët Hennessy Louis Vuitton chairman and ceo Bernard Arnault or PPR chief François-Henri Pinault earned.
From overseeing America’s fastest-growing speciality retailers to codifying cool, WWD talked to the women who are leading the way for the future of beauty. Check out our Instagram Stories to see how these women built today and are creating tomorrow. (📸: @hannah_khymych) #wwdbeauty
For @laperlalingerie's spring 2018 show, the brand chose to host their event at @thevenetianmacao. With Chinese megastars @bingbing_fan and @hubing in attendance, La Perla debuted a rock ‘n’ roll-inspired collection. The show marked the start of Sands Macao Fashion Week, which runs from October 19 to 24 — the city’s first such event. Pictured here are models backstage with glimmering eyes. #wwdfashion (📷: Cheuk-Yin To)
Trending for spring 2018: top stitch design. Gone are the days of stitch just for seams — designers are using the once-minimal detail to create strong decorative elements. (📷: Paola Testa; Styled by @andrew_shang) #wwdfashion
@tradesy is turning the concept of a showroom upside down with its new space in Santa Monica. Here, the company plans to hold events, art exhibits and a showcase rare fashion pieces like this Louis Vuitton boxing set. Get all the details on Tradesy’s first showroom on WWD.com. #wwdnews
Spotted last night at the @erdem x @hm launch event: Kate Bosworth, Rashida Jones, Kirsten Dunst and Selma Blair. The party, which took place in LA, also marked the opening of their pop-up shop. “I was interested in creating a collection that wasn’t in any way disposable. It was about pieces you’d create and keep forever, things that have a permanence to it,” designer Erdem Moralioglu said. #wwdeye (📷: Katie Jones)
Renee Zellweger in yellow in 2001 and again in 2017. Chosen as one of the 12 @pantone Leading Spring Colors (and dubbed “Meadowlark”), it only makes sense that the bright hue stands the test of time and is making a resurgence this season, seen already on stars like @blakelively and @gigihadid. (📷: Donato Sardello & @rexfeatures) #wwdfashion #tbt
Dior’s 70th anniversary celebration continues with a new exhibition at the Royal Ontario Museum in Toronto. “Christian Dior,” which is scheduled to run through March 18, takes a look at the founders tenure from 1947 to 1057 and feature 40 designs. Pictured here is an evening gown from the Ailée, fall 1948-49 haute couture collection. #wwdfashion (📷: Brian Boyle)