Rich ski enthusiasts had patronized Moncler's expensive quilted polyester jackets for a long time. However, according to a Bloomberg report, Moncler may have to lure more non-skiers if it wants to succeed in its IPO. Moncler begins its investor presentations today for its planned initial public offering in Milan.
An estimated three-quarters of the luxury clothier is derived from winter apparel sales. This would make it a riskier investment compared to cashmere cardigan sweater manufacturer Brunello Cucinelli which undertook a successful IPO last year. Neev Capital Managing Director Rahul Sharma said about Moncler's dependence on winter clothing, "It's inherently risky. In the summer, there's nothing to really go into their boutiques for." Neev Capital is a consulting firm based in London.
Another analyst from Exane BNP Paribas echoed Sharma's view. Luca Solca said Moncler may prove to be a tough sell if it does not have a broader range of products. Solca told Bloomberg, "If Moncler does not manage to get outside of this core category meaningfully, and continues to rely on its core product to drive growth, the consequence could be trivialization."
Shares of Cucinelli had risen three times since holding their IPO last year. Another Italian fashion brand, Salvatore Ferragamo also, tripled its shares after it went public two years ago. The success of Cucinelli and Savatore Ferragamo had encouraged the owners of Moncler to have another go at an IPO. In 2011, Moncler did not push through with its public debut. Instead, the ski apparel brand decided on a sale to Eurazeo, a France-based private equity firm.
According to Moncler Chairman Remo Ruffini, the company intended to sell 25 % to 3% stake for its share sale. A source familiar with the plan told Bloomberg that the IPO could raise up to EUR 1 billion. This would make it Italy's largest IPO in three years. In November 2010, Enel Green Power was able to sell EUR 2.5 billion or USD 3.3 billion when it went public.
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