Luxury sneaker brand Golden Goose Group SpA is initiating an initial public offering (IPO) in Milan, poised to be the largest listing in Italy in over a year. This significant move is expected to bolster the somewhat erratic recovery seen in Europe’s equity capital markets. The IPO represents a pivotal moment for the brand and the broader market, as it signals renewed confidence and activity in the financial sector following a period of uncertainty and subdued listings.
Golden Goose aims to raise €100 million ($108 million) through the sale of new shares. Additionally, the company's owner, private equity firm Permira, plans to sell an unspecified amount of existing stock. This dual approach, combining the issuance of new shares with the sale of existing ones, is designed to maximize capital influx and provide liquidity to current shareholders. The specifics of Permira's stock sale have not been disclosed, leaving room for market speculation and strategic planning.
Although the exact size of the offering is yet to be finalized, at least 25% of the company will be publicly listed. Bloomberg News has reported that Golden Goose might be valued at approximately €3 billion, including net debt. This valuation places the IPO as potentially the largest in Italy since Lottomatica SpA's €599 million sale in May of the previous year. The anticipated valuation underscores the market's positive outlook on Golden Goose’s business model and growth potential.
Golden Goose joins other major firms such as buyout giant CVC Capital Partners Plc and Spanish beauty group Puig Brands SA in advancing their listing plans in Europe this year. These movements are buoyed by a stock market rally to record highs. The resurgence in IPO activities follows a significant decline in 2022 and 2023 when central banks raised interest rates to manage inflation, dampening investors' risk appetite. The revival of IPO plans indicates a more favorable market environment and renewed investor confidence.
The market has experienced a notable rebound, with companies raising nearly $13 billion through IPOs this year, more than double the amount raised during the same period last year. In the United States, proceeds from stock market listings have reached $17.2 billion this year. These figures highlight a global resurgence in IPO activities, reflecting improved market conditions and investor sentiment. The increased capital raised through IPOs is a positive indicator of economic recovery and growth prospects.
Despite this rebound, the recovery has been uneven. Some companies have chosen not to list because they were unable to achieve their desired valuations. For example, Bloomberg recently reported that Greyhound bus owner Flix postponed a planned listing in Frankfurt, and battery maker Northvolt AB delayed its Stockholm IPO to the following year. These examples illustrate the challenges that still exist in the market, where not all companies are finding favorable conditions for going public.
Golden Goose’s IPO might attract significant attention due to its celebrity endorsements. The brand’s shoes, known for their weathered designs, have been worn by celebrities such as singers Selena Gomez and Taylor Swift. This high-profile visibility helps to enhance the brand's appeal and marketability. On the company’s website, a pair of Ball Star Wishes sneakers for men is priced at $740, reflecting the brand's positioning in the luxury segment.
Golden Goose is entering the market at a time when the luxury sector is experiencing a slowdown. For example, Kering SA recently reported an 18% decline in sales at its Gucci brand in the first quarter due to weak demand in China. Similarly, LVMH reported only a 2% organic sales growth in fashion and leather goods for the first quarter, compared to 18% growth a year earlier. These trends highlight the broader challenges faced by the luxury sector, making Golden Goose's IPO particularly noteworthy.
The proceeds from the IPO will be used by Golden Goose to reduce its debt. The company aims to achieve net sales of around €1 billion by 2029, up from €587 million last year. This ambitious target underscores Golden Goose's growth aspirations and strategic initiatives to enhance its market position and financial stability.
The company also plans to invest in new markets to attract a younger customer base, according to Chief Executive Officer Silvio Campara. Currently, about 90% of Golden Goose's business comes from the US, Europe, China, and Japan, where the average consumer age ranges from 36 to 51 years. The company is now targeting new markets with a younger demographic, such as South America, Africa, the Middle East, and India, where the average age ranges from 19 to 24 years. This strategic pivot aims to tap into the burgeoning youth market in these regions.
Another strategy Golden Goose will employ to boost sales is the personalization of sneakers for customers. Personalization is described as “really the new frontier,” by Campara. The company is shifting from hand-made to soul-made, incorporating the final consumer into the creative process. This approach aims to enhance customer engagement and brand loyalty by offering unique, customized products.
Permira acquired Golden Goose for €1.3 billion in 2020. During the IPO pitch meetings late last year, bankers wore Golden Goose sneakers with sharp suits in an effort to impress potential clients and secure roles in the deal, as reported by Bloomberg News in November. This anecdote illustrates the brand's cultural impact and the unique approach taken by financial professionals to align themselves with the brand's image.
The IPO is being arranged by Bank of America Corp., JPMorgan Chase & Co., Mediobanca SpA, and UBS Group AG. These leading financial institutions are collaborating to ensure the success of Golden Goose's public offering, leveraging their expertise and market reach to attract investors and facilitate the listing process.
30.05.2024
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