MILAN — Aeffe SpA shares fizzled in their stock market debut Tuesday, losing 4.6 percent on their first day of trading.Already last week it was evident the IPO, Italy's first fashion stock market offering in years, wasn't sparking a great deal of investor interest. Despite demand for nearly double the amount of shares on offer, Aeffe shares were priced at 4.10 euros ($5.66 at current exchange) a share, the bottom end of the initial valuation range.Aeffe shares slid 4.6 percent to close at 3.91 euros ($5.41) on the exchange. They underperformed the overall market, which shed 1.8 percent on Tuesday.Few analysts are covering the stock since Aeffe is a relatively small company. Alfredo Mele, a manager at financial Web site ipo.it, said Aeffe's price-to-earnings ratio is significantly more expensive than that of its luxury peers, including Mariella Burani Fashion Group SpA, Valentino Fashion Group SpA and Tod's SpA. "[Aeffe] offers too vast a range of brands and strategic messages to...warrant the valuation levels the company is asking of the market right now," Mele said.Regardless of the shares' performance, the IPO still generated about 78 million euros ($107.64 million) for Aeffe's coffers. As reported, the company plans to use the IPO-generated funds to develop its portfolio of fashion brands, including Alberta Ferretti, Moschino and Pollini. It also has a licensing deal to produce ready-to-wear for Jean Paul Gaultier.Although Aeffe's debut was a difficult one, it doesn't necessarily reflect a dearth of market appetite for luxury goods companies. With annual sales of 275 million euros ($346.5 million), Aeffe is considerably smaller than Prada SpA and Salvatore Ferragamo SpA, both of which are also eyeing stock market listings. The firm also lacks the international profile of many other brands."Alberta Ferretti and Moschino are more like niche brands and evidently they didn't succeed in winning over investors," Mele said.An Aeffe spokeswoman said the company is monitoring the shares' performance and withholding any further comments until it issues second-quarter results on Friday.
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