Prada Intends to Conquer Asia Through Stock Markets

15 October 05:20 AM

Today Hong Kong is a place quite attractive for ‘pilgrimage’ of American and European investments. This is supported even by the fact that the financial guru, George Soros, invested 50 million dollars in stocks of a local company himself. Like him, many western investors see huge potential of Hong Kong’s stock markets and bring in large amounts of resources. In addition, local stock exchanges are interesting in terms of a company’s own IPO. This is an objective, for example, of one of Europe’s most famous fashion houses – Prada, the Italian family enterprise with a history of almost a hundred years. According to official information, Prada plans to place 1-1.5 billion Euros worth of stocks in the Hong Kong Stock Exchange. Proceeds from placement will be used to repay debt, develop the company’s own retail network and launch new production lines.

A quick note: the Italian fashion house has tried three times over the past ten years to become actively involved in stock markets but their intentions were never put into practice for different reasons. Even today, despite their allegedly full preparedness to enter the stock market of Hong Kong, the Italians cast their looks back on their homeland continent in search of a more promising, in their viewpoint, European exchange. Nevertheless, Prada’s representatives say that the fashion house used to treat stock markets as a source for attraction of additional resources to their business, but now money is not of primary importance. Prada’s management intends to work in the stock market with long-term prospects in mind. Moreover, the fashion house is planning to turn the company into a transnational corporation.

Why is it Hong Kong that the fashion house shows an interest in?

The reason is very simple: this Asian region, as Prada’s representatives believe, will join the leaders of global stock markets within the next decade. As a result, this will hold attractive prospects for the Italian fashion house. Another advantage the Hong Kong’s stock market has for the fashion house is that current demand for Prada’s products is significantly growing both in Asia on the whole, and in China, in particular. Like in Europe, the Italian fashion house sells 40% goods of the total sales in Asia today. The remaining 20% is taken off by the US. The company itself says that soon Asia will come ahead of Europe in terms of products bought from Prada.

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