Salvatore Ferragamo SpA, whose shoes have been worn by Marilyn Monroe and Jennifer Lopez, is “totally committed” to the Italian stock market for an eventual initial public offering, Chief Executive Officer Michele Norsa said.
Hong Kong has lured companies such as L’Occitane International SA, the French maker of beauty products, which is raising money for expansion in fast-growing markets like China. On May 7, L’Occitane will follow Russia’s United Co. Rusal, the world’s largest aluminum producer, in being the first company from its country to make a trading debut in Hong Kong. Rusal listed in January.
While it makes sense to explore other financial markets, Florence, Italy-based Ferragamo “is totally committed to the Italian market,” Norsa said yesterday in a telephone interview. As one of the few luxury companies that makes all its products in Italy, it’s important that 83-year-old Ferragamo maintains “Italian-ness at all levels, from head to toe,” the CEO said.
The Ferragamo family, which owns the maker of 540-euro ($698) Derby shoes, may sell shares to the public next year, Chairman Ferruccio Ferragamo said in a February interview. JPMorgan Chase & Co., Mediobanca SpA and UBS AG are advising on the IPO.
‘Uncertainty’ in Europe
Ferragamo posted a 15 million-euro net loss in 2009 because of a one-time tax charge related to previous fiscal years, the shoemaker said April 30. Full-year earnings before interest, taxes, depreciation and amortization declined 28 percent to 62 million euros. Revenue fell 10 percent to 620 million euros.
First-quarter sales gained 11 percent. The rebound, which was spurred by 20 percent revenue increases in some parts of China, is “very encouraging,” Norsa said. “Greater China is the biggest opportunity in the world,” he said.
Norsa declined to provide an outlook for the full year, citing the volatility of financial markets and “uncertainty” in Europe. In January, the CEO said he expected Ferragamo to report high single-digit growth in 2010.
Ferragamo postponed its IPO in 2008 after valuations for luxury companies declined on average 25 percent because of the recession. That year Italian rival Prada SpA for the fourth time put off its plan to go public, citing adverse market conditions.
European companies raised more than $11 billion in IPOs this year through April 29, exceeding 2009’s $7.7 billion total and the $6.5 billion from the U.S., according to Bloomberg data. The amount for Europe is the most for the first four months of any year since 2007. Almost 85 percent of the European IPOs this year have been completed since March, as the Stoxx Europe 600 Index rallied as much as 15 percent from its February low.
While IPOs in the region have raised more than in the U.S. so far this year, Barclays Wealth, Baring Asset Management and Clariden Leu said last month that Europe’s sovereign-debt downgrades may hurt demand or drive companies to offer concessions to buyers. European stocks had their biggest slump in five months on April 27 as credit ratings for Greece and Portugal were cut.
Companies in Europe, the Middle East and Africa may sell as much as $60 billion in shares through IPOs this year, according to an estimate by Zurich-based Credit Suisse. That would be the most since 2007, when they raised more than $117 billion, data compiled by Bloomberg show.