After years of mulling an initial public offering, Prada‘s board of directors has approved of the company’s intentions to be listed on the Hong Kong Bourse.
Prada’s currently making about 2 billion Euros a year in sales, and investors are betting that the company is worth at least 6 billion Euros. The stock market debut could happen as early as July.
So why is Prada going public, and why is the company going public in Hong Kong instead of Europe, where it’s based?
Companies do an IPO (initial public offering) in order to raise capital. The more money the company has, the quicker it can expand.
Which brings us to the next question. Most of Prada’s expansion is in Asia. It is debuting on the Hong Kong bourse so that its investors will be able to measure the results more closely. Investing in Prada means investing in Asia’s luxury retail business.
Tags: Hong Kong Bourse
Designer(s): Prada
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Good for them.
Miuccia has been pursuing Asia as far back as 1998 with choices like Takeshi Kaneshiro, Prada spokesperson for Asia…
http://takeshikaneshiro.org/pictures/d/1773-2/pradagif.jpg
The reason Prada is conducting their IPO in Hong Kong is because luxury is overvalued in Asia in general. I’m sure as IPO discussions are going on other Hong Kong-based financiers are figuring out how to short sell investors trying to buy into a (possibly) overvalued brand.