MILAN — After flirting with the stock market for the last seven years, Prada SpA said Wednesday that it is set to launch an initial public offering in 2008.
Depending on market conditions, a spokesman for the Italian luxury goods group said the listing on the Milan Stock Exchange is planned for next year, but there had been no decision on how much of the company would be floated. A source close to the deal suggested the move would likely be made in the second half, and that a 30 to 40 percent chunk would go public.
Industry sources valued Prada at 4 billion to 5 billion euros, or $5.76 billion to $7.2 billion at current exchange.
Prada's earnings before interest, taxes, depreciation and amortization for the six months ended July 31 rose 40 percent to 140 million euros, or $187.6 million at average exchange rates for the period. Sales in the half grew 18 percent to 811.5 million euros, or $1.09 billion.
"We are heading towards a new era in the company's history, with solid development potential on the basis of strong momentum, already shown by our results in the first semester of 2007," chief executive officer Patrizio Bertelli said in a statement.
The company, which owns the Prada, Miu Miu, Car Shoe and Church's brands, confirmed the appointment of Italy's Intesa Sanpaolo SpA and UniCredit SpA — two of its top lenders — and Goldman Sachs & Co. as global coordinators and joint book runners in the institutional placement. Intesa owns a 5 percent stake in Prada SpA.
Prada has pulled the plug on its IPO three times, citing unfavorable market conditions. But the Prada spokesman said the company was in "perfect condition" to list next year, referencing a track record of solid sales and EBITDA growth over the last three years and a strong internal management team. He added that Prada sales were in line to grow 20 percent in 2007.
The market flotation would allow the debt-ridden company to expand its retail network, the spokesman said. Prada lacks stores in some key European cities, such as Barcelona, and has none in India and Mexico. In the U.S., the spokesman said the company has a limited network compared with competitor Salvatore Ferragamo SpA, which is planning its own IPO next year.A Milan-based consultant said Prada SpA's net debt of about 500 million euros, or $720 million, was unlikely to be a motive for the IPO given the company's recent EBITDA figures, but that Banca Intesa might want to liquidate some of its 5 percent investment.
"It could be a motivating factor," he said.
The Prada family and Bertelli own 95 percent of Prada SpA through Prada Holding BV. The holding company has estimated debts of 600 million euros, or $864 million, bringing Prada group's total debt to more than 1 billion euros, or $1.58 billion.
A London-based analyst said it was logical for Prada to look to the equity markets to expand if it had run out of funding, particularly in emerging markets where 90 percent of the world's new millionaires are appearing. But from an economic perspective, it was a risky time to do so, in the face of a potential cyclical downturn.
A string of Italian luxury goods brands have gone public since the summer. Aeffe SpA, which controls the Alberta Ferretti, Moschino and Pollini brands, and produces collections for Jean Paul Gaultier, listed on the Milan Stock Exchange STAR segment for small companies in July. Jeweler Damiani SpA and luggage maker Piquadro SpA followed last month. All three are trading below their initial IPO prices.
A Ferragamo spokesman told WWD on Wednesday that there would be no developments on its proposed listing until "at least January."
The stock market seems a more distant option for Gianni Versace SpA. Company ceo Giancarlo Di Risio said this week that an immediate listing was not necessary to support further growth, although he would not rule it out in the medium to long term.
For Bertelli, however, the time is right.
"In the past few years Prada successfully completed a reorganization which led to an increase in profitability and to a strengthened leadership position," Bertelli said. "Now we look at the financial markets with efficient industrial processes and a strong and experienced management team."
The company has refocused its management priorities on its core Prada and Miu Miu brands after selling off the underperforming Helmut Lang and Jil Sander in 2006 and Azzedine Alaïa this fall.Prada has also bolstered its management ranks. In October, the company tapped former Gucci Group and Burberry executive Brian Blake as chief operating officer, a newly created role.
Also Wednesday, Prada said it has begun setting up the compliance committees required for a stock market listing. It has appointed Italian law firm Bonelli Erede Pappalardo as its legal adviser on the deal.
“These collections continue to build on that vision, empowering differently abled adults to express themselves through fashion,” said @tommyhilfiger of his line of adaptive apparel, which launches today. The line consists of 37 men’s and 34 women’s styles based upon the pieces from the spring Tommy Hilfiger sportswear collection. #wwdnews
“Stranger Things” is getting a new cast member for season 2. Meet @sadiesink_, the 15-year-old who will be joining the Netflix series for its new season. You may recognize her from “The Glass Castle” with Brie Larson and Woody Harrelson, but the Texas native’s next role goes in an entirely different direction. She describes her character, Max, as “a rough and tumble skater girl [who] becomes friends with the boys at school.” The second season debuts on October 27. (📷: @jgreenery) #wwdeye
Amid the Harvey Weinstein controversy, there’s another sector that’s being put under the spotlight for sexual abuse: the modeling industry. While rumors about abuse and sexual harassment of female and male models — and the photographers, agents and others who perpetrated it — have circulated within the fashion world for years, model @cameronrussell started posting stories from models on Instagram last week about abusive situations they’ve encountered — from sexual harassment and molestation to attempted rape. Over 75 have weighed in so far. Read more on WWD.com. Link in bio. #wwdnews
To celebrate its 16th anniversary, @dylanscandybar tapped designers and celebrities to create mosaics out of candy. The mosaics will be auctioned off to support the philanthropic cause of each participant’s choice. Pictured here is the mural created by @aliceandolivia's Stacey Bendet. For a first look at some of the other artwork being unveiled tonight, go to WWD.com. #wwdeye
The annual Veuve Clicquot Polo Classic in Pacific Palisades this weekend drew Kate Hudson, Tracee Ellis Ross, Laura Dern and more. See pictures of the star-studded event on WWD.com. (📷: @chelsealaurenla) #wwdeye
In his new book “Hollywood Royale,” Andy Warhol’s Protégé Matthew Rolston celebrates the Eighties revival of Hollywood glamour. Featuring more than 100 portraits taken by Rolston from 1977 to 1993, the book contains photos of icons like Michael Jackson, Cyndi Lauper, and @drewbarrymore, pictured here in 1991. “Hollywood Royale,” out today, will be accompanied by an exhibition opening at Los Angeles’ Fahey/Klein Gallery on March 1. #wwdeye
"Nowadays when life is not so happy with everything going on in the world, I think people come to me for a little bit of whimsy and color and fun." - Designer Rebecca De Ravenel on her cult-favorite jewelry line. (📸 : @vsteves) #wwd40
“Everyone is talking about how the retail industry is struggling, but I think it’s an incredible time because brands who are doing something different and innovative are setting themselves up for the future,” said @adamgoldston, who founded the luxury athletic brand @apl with his brother @ryangoldsten. The Goldston’s are part of WWD’s 40 under 40: a group of industry notables. See the rest of the list on WWD.com. (📷: @vsteves) #wwd40
@eyeswoon blogger Athena Calderone debuted her first-ever cookbook, “Cook Beautiful,” which is heavily centered on the presentation and visual expression of food. Pictured here are her miso glazed carrots from the book. Get the recipe on WWD.com. (📷: @johnny_miller_) #wwdeye