| Prada S.p.A. and Salvatore Ferragamo S.p.A. are similar in several aspects. They both have a deep Italian history, both are companies operating in the luxury goods and fashion industry, and both still have the respective families as controlling shareholders of the company. Due to the similarities, both in structure and markets, it was obvious that they would reach a size requiring external funding to fuel their growth. In year 2011, the management of both companies decided it was time to go public. The two companies, however, opted for very different destinations:the Milan-based Prada chose Hong Kong, while the Florentine Ferragamo decided to stay home and launched its IPO in Milan.The comparison between the two operations was only natural, but with the different location strategy, a comparison, albeit more difficult due to different levels of information disclosure, was in order. Upon reaching the end of the IPO processes two questions were automatic:1. Has Prada extracted more value from the investors by going public in Hong Kong?2. Is Prada going to set an example for future luxury companies in going public in their fastest growing markets?The research will start with an introduction of the luxury world, explaining the evolution, the trends, and the global performances in the last years. Following, there will be a description of the two main subjects of the study:Prada and Ferragamo, and the study will continue with the description of the Hong Kong Stock Exchange, Borsa Italiana, and the IPO processes of the two companies, with a paragraph dedicated on Prada’s possible valuation in Milan based on competitors’multiples. In the end, there will be an analysis of the secondary market performance along with a comparison of a few selected competitors to show the performances against the industry.The information and analysis are based on publicly available sources such as the prospectus of Ferragamo and Prada, respected financial websites, and official reports by banks and competitors. |
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