Handbag Maker MCM Plans IPO as Sales Set to TripleVinicy Chan
Luxury handbag maker MCM Holding AG is considering an initial public offering in two to three years amid sales that it expects to triple.
MCM, founded in 1976 in Munich, Germany, may also sell stakes to investors who are “complementary” to the company, such as property companies, before it goes public, Chairman Sung-Joo Kim said in an interview yesterday.
“We are open to talk to decent investors who have a mid-to long-term view,” Kim said. “We don’t want to be one of the 100 brands of a giant luxury group.” She declined to disclose the size of any stake sale or the IPO.
MCM joins brands such as Coach Inc., Furla SpA and Michael Kors Holdings Ltd. in courting Asia’s young middle-class who are willing to spend, even as their counterparts in Europe and the U.S. are holding their purse strings. Sung said MCM’s products are competing with the highest-level offerings in the market, such as those sold by Louis Vuitton or Prada SpA.
MCM expects its sales to rise to $650 million this year from more than $500 million in 2013, Kim said. They are expected to reach $1.5 billion in three to four years, with China, Korea and Japan each contributing about a third of the group revenue, she said on the sidelines of the Credit Suisse Asian Investment Conference.
MCM was acquired in 2005 by Sungjoo Group, a South Korean fashion retailer founded by Kim who has since rebuilt the German brand to cater for the tastes of young Asian consumers, she said.
“Consumers who buy luxury goods in Asia are very different from Europe,” the executive said. “In Europe, the consumers tend to be more mature; while in Asia, young consumers are the movers and shakers.”
Apart from handbags, the company also sells wallets, backpacks and other leather goods, according to its website.
MCM plans to have 72 outlets in China, Macau, Hong Kong and Taiwan by end of this year, from the current 40, Kim said. The region contributed a quarter of its sales last year.
In Japan, MCM plans to open two stores in Tokyo’s Ginza, a trendy shopping district, as well as 10 more sales counters at major department stores, Kim said.