Sixty Group plans US$75m listing
Celine Sun in Beijing
Italian fashion retailer Sixty Group, the owner of the high-end casual wear brand Miss Sixty, plans to raise about US$75 million through an initial public offering in Hong Kong to expand its presence in China.
Paolo Bodo, chief executive of Sixty Far East, said the group's China operation, Sixty China, would go public in the city either at the end of next year or in a couple of years when the company grew bigger.
'We will do it,' said Bodo, who is in charge of the group's businesses on the mainland, Hong Kong, Japan, South Korea and Taiwan.
The company is discussing the listing timing with sponsors and investment banks and will make the final decision by next month.
Sixty Group is the second Italian fashion company in the past month to flag plans to list in Hong Kong. Milan-based luxury brand Prada said last month that it was considering an IPO in the city next year, through which it hoped to raise up to Euro1.5 billion (HK$15.72 billion).
European companies are drawn to the Hong Kong capital market because of the attractive prices they can obtain for their shares.
'If we were listed in Europe, the price-earnings ratio we can expect is only something like eight or 10,' Bodo said. 'But in Hong Kong, the PE ratio could be as much as 20 to 25, which will provide more capital for our long-term development.'
In addition, the city is seen as the portal into the mainland, one of the fastest-growing and most sought-after markets for international fashion brands.
'As far as I know, there are a number of fashion companies in Italy that are also interested in doing listings in Hong Kong. If we can make it, we will show them that it really works,' he said.
Founded by Wicky Hassan in 1989, Sixty Group operates several brands including Miss Sixty, Energie and Killah. Known for its fashionable denim collections, the group runs about 10,000 flagship stores, boutiques and selling points in department stores worldwide, including more than 200 on the mainland. It has eight stores in Hong Kong.
The company said the sales revenue on the mainland would hit 350 million yuan (HK$408 million) this year, up 37 per cent from a year earlier. The revenue for next year is expected to reach 450 million yuan.
Over the next two years, it plans to use the funds raised from the IPO to open 200 more shops in the country. About 70 per cent of them will be located in second- to fourth-tier cities, where the growth momentum is strong. While running most of its shops directly, it also plans to seek more partners and increase the number of franchised stores on the mainland to 30 per cent from the current 20 per cent.
'We want to be more independent and more efficient in making decisions because everything is changing so fast in this market,' Bodo said. 'By going public, we will become a self-financed company and gain more independence to run our China business.'