MILAN — Continuing its global expansion drive, Prada Group has signed a joint venture agreement with Al Tayer Insignia LLC to develop a network of Prada and Miu Miu stores in the Middle East.
This story first appeared in the April 28, 2011 issue of WWD. Subscribe Today.
With luxury retailer Al Tayer, which is based in the United Arab Emirates, Prada plans to open stores in Bahrain, Kingdom of Saudi Arabia, Kuwait, Oman and the UAE.
The joint venture, which is headquartered in Dubai, will help Prada directly enter the region for the first time.
“This agreement underlines Prada Group’s development strategy, which aims to seize opportunities in high potential markets worldwide, focusing on the retail distribution channel,” said a Prada spokesman. “It is as part of this strategy that a consistent rollout of Prada and Miu Miu stores is being planned in various markets across the Middle East.”
Part of Al Tayer Group, a diversified business conglomerate, Al Tayer Insignia operates more than 35 international luxury brands and nearly 80 stores in the area, including Bloomingdale’s and the largest Harvey Nichols outside the United Kingdom at the Mall of the Emirates in Dubai. It also has operations in Bahrain, Saudi Arabia, Lebanon and Qatar.
Prada has been focusing on the expansion of its retail network, which at the end of January comprised 326 directly operated stores. Sales at Prada’s retail division grew 44 percent in fiscal year 2010, or 22 percent on a like-for-like basis, accounting for more than 70 percent of the company’s total revenues. Wholesale revenues gained 9.4 percent.
Prada’s long-anticipated initial public offering also will help finance the opening of stores around the world.
The company, according to sources, filed documents with the Hong Kong exchange at the end of March and is said to be expecting the green light for its IPO between the end of May and the first days of June. According to a source, the time frame between the deposit of the documents and the approval from the Hong Kong Exchange is 60 days. Prada’s bookbuilding will then kick off in mid-June, with a road show in Hong Kong, Milan, New York, London and Frankfurt.
A source said that a cultural event, most likely supported by Fondazione Prada, the artistic and cultural foundation created by designer Miuccia Prada and her husband Patrizio Bertelli, will be organized for the financial community in Hong Kong during that period. Prada may travel to the Asian city for the occasion. In January, the designer flew to Beijing to stage a major fashion show event.
The official listing should be effective by mid-July at the latest, said a source. As reported, the goal is to list a 20 percent stake. Banca IMI-Intesa Sanpaolo Group, which owns 5.1 percent of Prada, is expected to sell its shares, while the rest will be sold by Prada and Bertelli, who control the majority 95 percent stake through Amsterdam-based Prada Holding B.V.
Analysts believe the IPO could value the company at up to $9.5 billion. A Prada spokesman declined to comment.
Timing for a listing is favorable, in light of Prada’s record profits and sales in 2010. In the year ended Jan. 31, the company reported a 150.4 percent surge in net profit, which reached 250.8 million euros, or $331 million at average exchange. Revenues totaled 2.05 billion euros, or $2.71 billion, up 31.1 percent compared with the year before.
Banca IMI-Intesa Sanpaolo Group, UniCredit, CLSA-Crédit Agricole Group and Goldman Sachs were tapped as joint global coordinators and joint book runners on the proposed IPO.