Giorgio Armani

MILAN – Three major Italian fashion houses – Giorgio Armani, Valentino and Ermenegildo Zegna – have the most potential to publicly list, according to Pambianco Strategie di Imprese, but only one is known to be considering an initial public offering.

On Tuesday, the Italian fashion consultancy presented its 11th annual ranking of the “listable” 65 fashion, luxury goods and design companies. For the fourth year in a row, Armani held the number-one spot, followed by Valentino, which jumped up from its seventh position. Armani has waved away the possibility of listing his company and last summer set up a foundation in his name to ensure the future of his group, but chief executive officer David Pambianco noted that Valentino’s owner, Qatar-based fund Mayhoola Group, has expressed interest in an IPO. That said, as reported earlier this year, Valentino ceo Stefano Sassi has pointed out that “there will be no IPO before 2017” and that “no date had ever been forecast.”

Carlo Pambianco, president of the consultancy, explained that “the aim of the research is to identify those companies with the prerequisites to launch an IPO in the next three to five years, regardless of whether a listing is even in the plans of the firm.” The goal is to fuel the interest of Italian companies in the capital markets. To wit, the study was presented at Milan’s Bourse.

Growth is the key driver of the annual research report. Considering 2015 financial reports, compared with the previous year, Armani, which had net cash on hand of 654 million euros, or $726 million at average exchange rates, in 2015 reported a 4.5 percent gain in revenues to 2.65 billion euros, or $2.94 billion. Valentino joined the $1 billion club with sales leaping 44 percent to 1.04 billion euros, or $1.15 billion, in 2015.

Zegna came in third, one slot down from last year. Although sales increased 4.2 percent to 1.26 billion euros, or $1.4 billion, earnings before interest, taxes, depreciation and amortization decreased 21 percent to 146 million euros, or $162 million. Gianni Versace rose up one position, with sales and EBITDA up 19 percent. Dolce & Gabbana fell one slot down to fifth, with sales of 1.19 billion euros, or $1.32 billion, up 12.7 percent compared with 2014, and a small erosion of profitability. EBITDA decreased 0.8 percent to 122 million euros, or $135.4 million.

The list included seven new entries: Golden Goose (ranked ninth); hosiery firm Golden Lady (21st); Gianvito Rossi (31th); De Rigo and Lardini, respectively 45th and 46th, and Morellato and Bottega Verde, 49th and 50th, respectively.

Hosiery, innerwear and swimwear firm Calzedonia climbed four positions to eighth; Paul & Shark was up four slots to 10th; Furla gained two to 11th, and Canali also was up two positions to 12th. Max Mara went from 18th in 2014 to 13th last year, while Etro dropped from 10th to 14th. OTB lost two positions to rank 17th. Fabiana Filippi rose to 15th from 22nd and Stone Island climbed nine positions to 20th. Marcolin ranked 38th in 2014 and 26th in 2015, while Missoni dropped to 29th from 25th.

Pambianco also identified the top 15 listable companies in design and furniture. Flos and B&B Italia, both controlled by the fund Investindustrial, Sergio Rossi’s owner, came in first and third, respectively. Kartell was second. There were no changes for the three companies compared with 2014.

David Pambianco said that, in total,  the companies would reap 11 billion euros, or $11.7 billion at current exchange, if they went public, with a total market capitalization of 37 billion euros, or $39.4 billion.

The sample basket comprised 860 firms operating in the fashion and luxury sector and 160 companies in home and design, which were initially narrowed down to 120 and 35, respectively.

Factors used to identify the top 65 companies eligible for the listing were: revenue growth in the 2012-2015 period; average EBITDA over the last three years; brand awareness; size; exports; retail; debt; and market segment.

Pambianco said that aggregated, the top 50 companies would see 2015 sales of 19.8 billion euros, or $22 billion; an 8.4 percent revenue growth; average sales of 396 million euros, or $439.5 million; EBITDA value of 2.75 billion euros, or $3.05 billion, and EBITDA percentage of 13.9 percent. Exports would account for 59.1 percent.

The research was conducted in partnership with Ernst & Young.