Luxury goods giant Prada looks east to cash in on Asian boom
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According to The Guardian, in what is the latest sign that the luxury world order is shifting east, Prada (which has operated out of Europe’s fashion capital of Milan for nearly a century) is looking to sell shares in Hong Kong. It is trying to raise as much as £1.6bn from selling just a 16.5% stake in the company. The Italian fashion brand drew gasps, as this valuation makes the business worth some £9bn.
In what promises to be the latest mega deal in the luxury sector (following hot on the heels of upmarket shoe group Kurt Geiger for £215m and Jimmy Choo for £500m), analysts said Prada’s decision to seek a stock market listing in Hong Kong rather than London just goes to show the spending power of newly wealthy Asian consumers. Asia already accounts for 40% of its £1.8bn sales.
The generation of high rollers created by the runaway growth (of the Chinese economy in particular) now underpins global demand for luxury goods. While the high street remains in the doldrums, sales of designer clothes, watches and handbags are expected to reach a new high of £165bn this year. Whether it is Burberry, Tod’s or Louis Vuitton, luxury goods firms are looking east for growth.
See economic environment - emerging markets.
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