MILAN — Brunello Cucinelli SpA is fashion’s latest stock market star.
This story first appeared in the April 30, 2012 issue of WWD. Subscribe Today.
Shares of the luxury brand soared 49.7 percent Friday on their first day of trading on the Milan Stock Exchange, closing at 11.60 euros, or $15.37 at current exchange rate.
During the day, the company’s shares were temporarily halted twice after they rose 48.4 percent from the opening price to 11.38 euros, or $15.07, and then rose 47.23 percent from the opening price to 11.41 euros, or $15.12. In addition, the title negotiation started about 20 minutes late on Friday because the buying orders’ prices were so high they exceeded the set minimum limit of variation.
There were numerous indications the company was likely to do well, including the early closing of the road show. Cucinelli, which floated a 30 percent stake in the company (33 percent with the Greenshoe option) for a total of about 22.4 million shares, received applications from 8,459 investors and the offer was oversubscribed by more than 17 times.
“I’m moved, but this was the dream of my life,” said chairman Brunello Cucinelli, during the opening ceremony at the Bourse, attended by the Cucinelli family and a large number of company employees.
Cucinelli, who called himself “guardian” of the company, explained his personal strategy of approaching the biggest investors, who were invited to spend some time in Solomeo, where the company is based, to see firsthand how the business works. “We explained our philosophy to them, our idea of sustainable profit, and we showed them how our company aims to give dignity to human work.”
Cucinelli, who was joined on the stage by his daughters Camilla, and Caroline, to present a precious, 16th-century edition of Aristotle’s “Ethics” to Italian Bourse chief executive officer Raffaele Jerusalmi, forecast a brilliant future for the country.
“We should try to speak more kindly of Italy,” Cucinelli said. “I don’t agree with those saying the country is crumbling, but I think that a golden century is on its way, with a return of great ideas.”
He closed his speech with a comment on art. “I would not be happy to work in a place with a sculpture insulting humankind out front,” Cucinelli said, criticizing Maurizio Cattelan’s provocative sculpture in Piazza Affari, which depicts a hand with the middle finger raised. “In Ancient Greece, the arts meant beauty; now it just means novelty, and I don’t think it’s proper.”
On Monday Brunello Cucinelli priced its initial public offering at the highest end of its price range, starting from 6.75 euros, or $8.49, setting each share at 7.75 euros, or $10.27, in a flotation that will allow the company to raise 158.1 million euros, or $209.4 million.
Among the shareholders are two of Italy’s major fashion players, Ermenegildo Zegna and Benetton Group SpA, which respectively acquired stakes of 3 percent and 2 percent.
Including a capital increase, the company will have a market capitalization of 527 million euros, or $698 million, after the listing.
Probably boosted by Cucinelli’s incredible performance, retail and luxury stocks closed with very good results. Among the others, Salvatore Ferragamo gained 3.89 percent to 17.35 euros, or $23; Yoox Group SpA rose 8.19 percent to 11.10 euros, or $14.70, and Aeffe SpA was up 7.83 percent to 0.64 euros, or 85 cents.