Bespoke designs have made Golden Goose a favorite but the IPO is off. Photographer: Jason … [+] Alden/Bloomberg
© 2023 Bloomberg Finance LP
No wonder that London is pinning its hopes on creating a more welcoming listing environment for fashion retailer Shein than the so-far-antagonistic New York.
Europe can’t buy a decent IPO just now and the market got yet another kick while it was down this week as Golden Goose, the Italian purveyors of worn-looking sneakers – which counts a certain Taylor Swift among its fans – suddenly spiked an intended listing on the Milan, Italy stock exchange.
The trendy Italian footwear label, which retails sneakers starting at around $500, had spent upwards of 10 months preparing for a listing that it had hoped would bring in over $600 million and, according to The Financial Times, seven banks had lined up to build its initial public offering book, which was oversubscribed.
Fund management giant Invesco had agreed to be a cornerstone investor with a $100 million commitment but Golden Goose’s private equity owner Permira instead hit the off button, apparently worried over growing political uncertainty in Europe, where far right groups achieved some shock wins in recent European Union elections.
Those results prompted French President Emmanuel Macron’s surprise decision to call snap parliamentary elections, raising the prospect of a far-right government leading the eurozone’s second-largest economy after Germany. That helped shares in luxury goods giant LVMH and high end fashion label Moncler to continue sliding, sending alarm bells ringing around the European luxury sector.
And it was also enough for Permira to take the unexpected decision of calling time, at least for now, over the intended Golden Goose IPO.
Permira Halts Golden Goose IPO
The “current market backdrop is not the right environment to take the company public,” the firm said in a statement Tuesday, as it added that the decision over an IPO will be reassessed in the future. The European Parliament elections and the calling of a general election in France impacted not only markets in Europe but the luxury sector in particular, Golden Goose pointed out.
It stressed that the brand’s IPO process had been “engaged widely” with investors, with the first day of trading due to take place this Friday.
The last-minute decision may also be due in part to a number of underperforming listings from Permira in recent times, including that of iconic U.K. boots maker Dr Marten in 2021. The company, which had been performing well prior to its IPO thanks to connecting with its heritage roots, has issued five profit warnings since and its shares have plunged by over 80% – at one point in April of this year they were significantly below that.
Golden Goose was co-founded by husband and wife team Alessandro Gallo and Francesca Rinaldo 25 years ago and Permira acquired the footwear brand, which is headquartered near Venice, for just under $1.4 billion shortly before the pandemic
Golden Goose has nearly 200 stores, with Europe and the Americas dominating sales. Photographer: … [+] Jason Alden/Bloomberg
© 2023 Bloomberg Finance LP
The IPO was expected to price close to the bottom of the projected range at circa $10 a share, valuing the company at around $2 billion, which was significantly below the circa $3 billion valuation that had previously been touted.
However, there was no shortage of take-up and the book is understood to have been roughly four times subscribed at that price according to reports.
Golden Goose Youth Connection
Part of Golden Goose’s appeal is that its sneakers can be customized at its stores, of which there are about 190, attracting younger shoppers who value individuality, and with whom the brand has proven popular.
This formula has generated impressive growth, with 2023 sales up 18% to just shy of $630 million, and adjusted earnings before interest, tax, depreciation and amortization up 19% to $214 million. Expansion continued in the first quarter of this year, although sales growth slowed a little to 12% while EBITDA was up 17%.
Currently the Americas and Europe account for 41% each of Golden Goose’s sales, providing lots of space for expansion in Asia and the Middle East.
But, for now at least, another European IPO is off.
Source link : https://www.forbes.com/sites/markfaithfull/2024/06/20/political-turmoil-in-europe-blamed-for-killing-the-golden-goose-ipo/
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Publish date : 2024-06-20 18:33:49
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