Designer Down Coats Puff Up the Milan Stock Market

Moncler strutted onto public markets today to wild applause. Shares of the maker of high-end down jackets (and snowsuits for toddlers in the 1 percent) surged 41 percent between Wednesday, when the company closed its initial public offering, and this morning, when the shares first started trading.

The biggest winner in the deal, however, may be Borsa Italiana, the Milan stock market that has struggled a bit in the past few years to maintain its reputation as the tastemaker of fashion finance.

Milan still has plenty of cred when it comes to designing and making fine clothes and shoes. But when fashion executives entered public markets in the past decade, many piled their shares in Hong Kong and New York, much bigger, busier stock-buying bazaars.

Almost half the money raised in apparel IPOs in the past 10 years has been in Hong Kong, according to analysis by Dealogic. U.S. markets handled slightly more than one-third of fashion IPOs by volume, while Italy welcomed 16 percent.

Most notably, Prada had its IPO in Hong Kong in June 2011. Around the same time, Coach, which trades in the U.S., had a secondary offering in Hong Kong. Meanwhile, Hong Kong-based Michael Kors, the biggest fashion darling on Wall Street of late, had its IPO in New York two years ago.

Borsa Italiana, however, has done a pretty decent job wooing fashion executives based nearby. The Milan exchange may have missed Prada, but in June 2011 it introduced shares of Salvatore Ferragamo. A few months later, it hosted the IPO of Bruno Cucinelli, and this spring it listed Moleskine, the Milan company that makes those little leather notebooks with the elastic strap.

Part of placing an IPO is simple logistics. When Moleskine executives need to ring an opening bell or hop on TV to discuss financials, they have only to zip through town in a cab, rather than cross an ocean on a jet.

Wooing institutional investors who typically buy IPO shares is a different—and far more geographically challenging—matter. Portfolio managers, however, have an increasingly global view these days, according to Howard Davidowitz, founder of the retail consultancy Davidowitz & Associates.

“The pension funds who follow fashion are smart enough to know Milan and Hong Kong, too,” he said. “The money goes where fashion happens.”