Faced with volatile global markets and caution from Chinese investors, Prada has cut the price of the shares it is selling in an initial public offering on the Hong Kong market.
That makes the shares worth around 1.5 billion euros – about 20 percent less than the Italian fashion house had initially looked to raise.
The deal was the biggest share offering in Hong Kong so far this year.
Prada’s move came a day after luggage brand Samsonite International slumped almost eight percent in its Hong Kong trading debut, though it improved on Friday.
Indeed, only MGM China has posted a first-day gain among the largest IPOs in Asia this year, reflecting investor caution at risking capital in weakening markets.
Selina Sia, head of consumer research at Mirae Asset in Hong Kong, said: “Luxury demand is very self explanatory and it makes a lot of sense for companies like Samsonite and Prada to list in Hong Kong, but we’re talking about quite a volatile market these days.”
Prada’s choice of Hong Kong as a listing venue was controversial at home in Italy, but owner and designer Miuccia Prada said last week that the decision was an easy one, given China’s relevance as a major economy and its voracious appetite for luxury products.
China’s consumption of luxury goods is forecast to grow 18 percent annually to about $27.5 billion by 2015, from about $12.2 billion in 2010, according to consultancy McKinsey.