Prada SpA, buoyed by surging profit at the eponymous fashion label, is exploring options to revive an initial public offering, according to four people familiar with the talks.
Prada, which has scrapped an IPO four times in the last 10 years, is considering a Hong Kong listing in addition to Milan, said two of the people, who declined to be identified before a decision is made. Prada hasn’t yet appointed banks to manage the transaction, and talks may not lead to an offering, they said.
The company has cut debt and opened new stores in Asia as the industry rebounds from the worst year on record. Perfume maker L’Occitane International SA sold stock in Asia last month to take advantage of demand for IPOs in the region amid optimism that economic growth will exceed expansion elsewhere.
“Prada has sailed well through choppy waters, thanks to its presence in Asia and the resilience of its shoe and handbag business,” said Armando Branchini, vice-president of Milan- based consulting firm InterCorporate. “The strong rebound in the first quarter, which may continue through the end of the year, would make it an opportune time to consider an IPO.”
The company continues to monitor market conditions, said a Prada spokesman, declining to comment further.
While Prada may hold an IPO as soon as this year, it’s more likely the firm will wait for stock markets to rise and sell stock in 2011, according to one person.
The fashion company, which is controlled by Chief Executive Officer Patrizio Bertelli, his wife Miuccia Prada and her family, said May 24 first-quarter earnings before interest, taxes, depreciation and amortization surged to 64 million euros ($78.5 million) from 11 million euros a year earlier. Revenue rose 26 percent to 366 million euros, led by a 62 percent gain in the Asia Pacific region.
Prada abandoned plans to list in 2008 because of adverse market conditions. The company had hired Intesa Sanpaolo SpA, UniCredit SpA and Goldman Sachs Group Inc. to manage the offering at the time.
Prada, founded by head designer Miuccia Prada’s grandfather Mario Prada in 1913, still operates its first outlet in Milan’s 19th century Galleria shopping arcade.