Once again, rumors are flying that Prada may be considering an IPO in Hong Kong rather than its home base of Milan, attracted by the prospect of a higher price in the red-hot Asian consumer market. We heard similar rumblings earlier this year in the wake of French skincare and personal care chain L'Occitane's Hong Kong IPO, which Prada quickly denied. As a company spokesman told the AFP this week, though Prada has mulled an IPO four times in the last 10 years, a weak global economy has caused delays in the process. Now, with luxury demand on a global level greatly outpaced by Asia in general and China in particular, the time may finally be right.
The Milan-based company’s sales may reach 2 billion euros ($2.75 billion) in 2010, while earnings before interest, taxes, depreciation and amortization may be between 450 million euros and 500 million euros, the people said. Prada will probably make a final decision on whether to proceed with an IPO before the end of this year, they said.
“It’s starting to look like the right moment to do it,” said Armando Branchini, vice-president of Milan-based consulting firm InterCorporate. “The conditions are there for an IPO now, both externally and at Prada.”
Prada, which also owns the Miu Miu, Car Shoe and Church’s brands, has cut debt and opened new stores in Asia as the luxury-goods industry rebounds from its worst year on record.
As always, this story -- just like the recent rumors that a Chinese investor was quietly trying to become Prada's largest shareholder -- remains conjecture until we definitively hear otherwise.