Prada contemplating a Hong Kong IPO? We Thought So... 8/9/10

Prada has been expected to make an IPO for a while now- On September 20 we commented on the brand’s strong performance recently, and suggested on top of more rumours that now is perhaps as good an opportunity as ever. It seems we were correct. Market conditions allowing, Prada is contemplating a Hong Kong flotation for 2011, in time to take advantage of the expansion of the Chinese market- already the fastest growing, and soon to be the world’s largest market for luxury brands. This is the most likely move, but Prada have not decided just yet.

Prada have flirted with the idea of making an IPO for years, but each attempt has been thwarted- they just haven’t seemed to have great luck with timing. If they do list, it will be fourth time lucky following three failed attempts in the past ten years. Perhaps fourth time very lucky, and well worth the wait. If they can time the offer in line with Chinese growth, as well as economic recovery in the US and Europe, Prada might also be able to shake off its debt (estimated at approx $1.4 billion AUD) and emerge positively laughing. All in all, Prada is expected to be valued between 4.5-6.7 billion euros ($6.4-9.6 billion AUD).

Still, nothing is set in concrete, and the move will involve significant changes to Prada’s executive and supervisory structure. Decision-making currently lies very much in the hands of Chief Executive Patrizio Bertelli, who, with the family of Muiccia Prada, controls 95 per cent of Prada Spa’s capital. The Italian bank Intesa Sanpaolo owns the remaining 5 per cent.

We can’t wait to see what is in store for one of the world’s most iconic fashion houses, and impatiently await further revelations.

Image credit: pradafan.com

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