Dickson Concepts will open more than 50 stores in Asia this financial year following the successful flotation of its upmarket London fashion store, Harvey Nichols, on the London stock exchange. Executive chairman Dickson Poon, after announcing that 24 million shares representing 49.9 per cent of Harvey Nichols had been placed at 270 pence (about HK$31.50) per share, said the flotation was over-subscribed more than 15 times. The price was at the top of the forecast 240p-270p range. He said dealing would start on April 26. Net proceeds from the listing were $750.2 million, boosting Dickson Concepts' aggregate net cash to more than $1.2 billion. The price valued Harvey Nichols at $1.736 billion - 8.7 times what Mr Poon paid for it. Mr Poon said the opening of 50 new stores throughout the region by Dickson Concepts this financial year could be achieved without tapping the proceeds from the Harvey Nichols' sale. Dickson Concepts planned to open a minimum of 27 new shops in Hong Kong under different brand names, and a total of between 23 and 30 in Taiwan, Singapore and Malaysia. The company has just signed a long-term exclusive franchise with Joan Helpern Designs Inc of the United States to open a total of six stores in Hong Kong, Taiwan and Singapore under the Joan & David name. It also plans to open two additional Warner Bros Studio Stores in Hong Kong and one at Singapore's Changi Airport. Dickson Concepts has more than 220 stores throughout Asia at present. 'We were aware of Dickson Concept's plans to open new stores this year, but the number looks quite aggressive,' Schroders analyst Gordon Crosbie-Walsh said. According to Mr Crosbie-Walsh, even after those new shop openings, Dickson Concepts would have plenty of cash on hand for a bigger deal. 'The company has hinted several times during the past six months that it is in the market for a big acquisition,' he said. 'I wouldn't be at all surprised if they made one this year.' Mr Crosbie-Walsh expected any acquisition to be made in the European or US luxury store markets, rather than in Asia. On this, Mr Poon would only trot out the bland line that his company 'was always looking at potential investments'. In London, analysts were left scratching their heads over how Mr Poon had pulled off the Harvey Nichols float at 26 times historic earnings, particularly because Dickson Concepts retains ownership of the freehold property on which the department store stands. The average price-earnings ratio in the British stores sector currently stands at 19 times. Analyst at Societe Generale Strauss Turnbull, Robert Snaith partly attributed the successful float to London's roaring market, buoyant on takeover froth. He expressed reservations about Harvey Nichols' plans to expand outside London, such as a proposed new store in Leeds. 'The history of big department stores opening in new locations isn't too hot,' he said. 'It tends to devalue their exclusivity.'
