Iconic labels Nina Ricci, Paco Rabanne and Jean-Paul Gaultier make their market debuts on Friday as Spanish fashion and beauty group Puig begins trading on the Madrid stock exchange.
For the Puig family group, which has expanded rapidly into luxury goods, going public is a big step that will allow it to compete with industry giants such as Estee Lauder, Hermes, Kering and LVMH.
The move “is a decisive step in Puig’s 110-year history,” Chairman and CEO Marc Puig said last month, emphasizing the company’s “long-term approach.”
Founded in Barcelona in 1914 by businessman Antonio Puig Castello, the group has grown over the years to become a heavyweight in the cosmetics, fragrance and fashion sectors, strengthening its stance in recent years with a series of high-profile acquisitions.
Among her brands are Paco Rabanne, Nina Ricci, Charlotte Tilbury, Carolina Herrera and Dries Van Noten. He also owns a majority stake in the Jean Paul Gaultier label and has licensing deals with Prada, Christian Louboutin and Comme des Garçons.
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Family company
The Barcelona-based group, which specializes in perfumes and cosmetics, enters the market on Friday with an opening guidance price of 24.50 euros (about $26) per share.
Analysts said it was Spain’s biggest IPO this year and one of the biggest in Europe.
The price gives the group an estimated market capitalization of almost 14 billion euros, which will allow it to enter Madrid’s Ibex 35 stock exchange, which brings together Spain’s 35 largest companies.
The distribution will take place in two stages, the first of which will seek to raise an initial €1.25 billion through newly issued shares.
It will then make a “larger secondary offering” of existing shares held by holding company Exea to raise nearly €1.36 billion.
This could then be supplemented by the sale of shares earmarked for certain investors for another €390m, which would allow the group to raise around €3.0bn.
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Despite the move, the Puig family said it would retain a controlling stake in the company with 71.7 percent of the shares, along with the “vast majority of voting rights” — 92.5 percent — on the board.
“Greater economic influence”
The idea of an IPO was first raised by Puig himself in an interview with the Financial Times in October 2023, in which he said that being accountable to the market would bring “a discipline” that would prevent any problems when he passes the baton from one generation to the next.
“Sometimes family businesses can lose their place in the market. They can start to die slowly and no one inside the company knows about it,” he told the paper. “If you’re accountable (to investors), these things can be observed.”
According to XTB analyst Javier Cabrera, the IPO will allow the group to gain “greater financial leverage” by taking advantage of the “positive stock market momentum” in the luxury goods and fashion sector.
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Luxury goods are enjoying a boom with heavyweights set to post record sales in 2023, despite slowing after two years of double-digit growth.
Last year, Puig posted sales of 4.3 billion euros, a 19 percent increase over 2022, with a net profit of 465 million euros, up 16 percent year-on-year.
And that growth could accelerate thanks to Puig’s acquisition strategy, which in recent years has led to a “high level of growth” and “good revenue diversification, both geographically and in terms of business lines,” Cabrera said.
He also pointed to the group’s strong presence in China, a major consumer of luxury goods.
Source: AFP