So, you've probably heard that Prada, the Italian luxury goods company owned and operated by designer Miuccia Prada and her husband, CEO Patrizio Bertelli, finally went public last week and will officially begin trading shares on the Hong Kong Stock Exchange this Friday, June 24.
This is a huge deal, not only because there are very few public luxury goods companies (LVMH, PPR, Richemont, Burberry, and Hermes are the big ones), but because Prada chose the Hong Kong Stock Exchange to stage its IPO. We talked to some of our favorite fashion-meets-finance professionals about the significance of this event.
What does it mean? You probably know what an IPO--or initial public offering--is, but just in case, we asked retail analyst Brian Sozzi to clear it up: "An IPO is the selling of shares to the public market for the first time, in order for a company to raise money to expand operations, pay down debt, or for other corporate purposes."
Why did it happen? "Prada decided to IPO in Hong Kong because it has less rules and regulations and more importantly, it's close to the Chinese investor who wants to invest in luxury goods companies," says luxury consultant Patricia Pao, whose firm, The Pao Principle, does a lot of work in China. "Also, most luxury goods companies are relying on China consumption for their growth, so they want to be close to the market."
How can regular person--not a finance professional--buy Prada shares? To buy shares on the Hong Kong Stock Exchange, individuals have to find a brokerage firm who trades on the Hong Kong stock market. Check out HSBC Hong Kong, Irasia.com, or NobleTrading.com for more info.