Bloomberg News

Salvatore Ferragamo Gains in Luxury Shoemaker’s Milan Debut

June 29, 2011

(Updates with analyst comment in fourth paragraph.)

June 29 (Bloomberg) -- Salvatore Ferragamo SpA rose as much as 9.2 percent in the Italian luxury shoemaker’s debut on the Milan exchange after raising 344.5 million euros ($496 million) in an initial public offering.

The stock gained as much as 83 cents to 9.83 euros and was up 8.9 percent, at 9.80 euros, as of 11:39 a.m., giving the Florence, Italy-based company a market value of 1.65 billion euros. Ferragamo sold shares at 9 euros each, near the midpoint of the marketed range of 8 euros to 10.50 euros.

Ferragamo joins luxury-goods makers including Prada SpA in selling stock to the public as demand for bags and shoes in Asia fuels sales growth and draws investors. Prada, the Milan-based maker of Church’s shoes, has risen 15 percent since it started trading June 24 in Hong Kong’s biggest IPO this year.

“Ferragamo, like Prada, is part of a unique Italian industry that is growing in emerging markets and the U.S., and that explains their success in the IPO,” said Fabrizio Spagna, chairman of Axia Financial Research in Padua, Italy. “The stock is attractive because it’s a visible and recognized brand that managed to stay profitable, even through the crisis.”

Ferragamo, whose shoes have been worn by Marilyn Monroe and Jennifer Lopez, reported net income of 60.8 million euros in 2010 compared with a loss of 14.7 million euros a year earlier. Sales rose 26 percent to 781.6 million euros. Earnings before interest, taxes, depreciation and amortization advanced 83 percent in the period to 113.1 million euros.

--With assistance from Armorel Kenna, Elisa Martinuzzi and Sonia Sirletti in Milan. Editors: Jerrold Colten, Robert Valpuesta

To contact the reporter on this story: Paul Jarvis in London at pjarvis@bloomberg.net

To contact the editor responsible for this story: Celeste Perri at cperri@bloomberg.net


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