Shoemaker Ferragamo shines in Milan debut
Shares of Italian luxury shoemaker Salvatore Ferragamo have risen more than eight per cent in their first day of trading today, defying investors’ concerns that its price tag was too high in volatile markets.
The Florence-based maker of shoes worn by Hollywood stars, such as Audrey Hepburn and Greta Garbo, traded at €9.8 (£6.13) this morning, over the initial public offering price of €9 per share.
“We have faced difficult moments on the equity markets, but we made it,” Chairman Ferruccio Ferragamo said at a crowded ceremony marking the launch of trading on the Milan bourse, which was decked with black and white pictures of legendary Hollywood stars including Sophia Loren and Marilyn Monroe.
Milan fund managers said Ferragamo had benefited from a launch when markets were more optimistic about a crucial Greek austerity plan getting parliamentary approval. Passage would secure more aid for Greece from international lenders and avoid a default.
“But this is the first day, which is usually affected by speculation. Let’s see what happens in coming days,” said one fund manager.
“Ferragamo is not a dominant player and I’m doubtful on the outlook. Its targets look aggressive,” he said.
The shares had been priced at €9 each in the initial public offering, at the middle of their flotation range, valuing it in line with the group’s European peers.
The offer price puts Ferragamo on valuation of 18.3 times projected 2011 earnings, at a slight discount to luxury goods maker LVMH which trades at 19.8 times and Italian luxury leather goods maker Tod’s which trades at 20.7 times.
Larger rival Prada made a solid debut in Hong Kong on Friday, with shares rising by as much as 1.3 per cent.