Luxury sneaker maker Golden Goose postpones planned IPO

GOLDEN Goose Group pulled the plug on its Milan listing as a selloff in luxury stocks and the return of political risk in Europe threatened to dent appetite for the Permira-backed sneaker firm, even after it tempered its valuation expectations.

The company said that it decided to shelve the initial public offering (IPO) because of a “significant deterioration in market conditions”, confirming an earlier Bloomberg News report. Financial markets have been roiled by the announcement of a general election in France, and that has exacerbated months of declines in luxury stocks.

The sector, once known for its prowess to generate superior growth, has been weighed down by doubts over earnings and Chinese demand. Related stocks have failed to join a record-hitting spree in broader global equity markets this year, slipping 14 per cent over the last three months.

Golden Goose was set to price its IPO at the lower end of a marketed range, according to terms seen by Bloomberg. While demand was strong across the price range from the first hour of bookbuilding, the company said that the current market backdrop means it is not the right time to list.

“They are not an Hermes, they are not a Brunello Cucinelli – they are a different business in that they focus on trainers, but I don’t think they sit at that higher end of that luxury scale,” said Mark Nelson, senior equity analyst at Killik & Co. “The political environment in France has deteriorated over the last couple of weeks – there are lots of things that are outside of the company’s control, so it didn’t feel like amazing timing.”

The problems in the luxury sector and its underperformance has been widely known – some labels are offering unprecedented discounts on their products in China. An index tracking stocks such as LVMH and Moncler has seen its valuation decline nearly 13 per cent in the last three months, with multiples falling to 26 times forward earnings, well below the 34 times in 2021.

Milan-based Golden Goose was set to price the IPO at 9.75 euros a share, toward the lower end of its 9.50 euros to 10.50 euros range. It had been planning to sell about 10.5 million shares, while majority-owner Permira was to offer 43.6 million existing shares, with the stock set to start trading on Jun 21. 

At the top end of the price range, the listing would have raised as much as 595.7 million euros (S$864.5 million) and valued the company at about 1.7 billion euros, if the underwriters had exercised their overallotment option, according to Bloomberg calculations. Invesco was set to take 100 million euros of the shares as a cornerstone investor, according to the statement.

The shelved IPO also shows the ongoing challenge private equity firms face to exit companies. Investors are increasingly putting pressure on buyout firms to return cash, but exits – via either sales or listings – remain challenging, with the market still struggling to digest a gap between buyers and sellers.

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Permira may also have been cautious about the aftermarket performance of the shares following the flop of its listing of British bootmaker Dr Martens in 2021. The shares have slumped 78 per cent in London since listing amid multiple profit warnings.

Golden Goose’s listing would have been Milan’s biggest since at least the 599 million euro sale by gambling company Lottomatica in May last year.

Among other pending European listings, Greyhound bus owner Flix also recently postponed its plans for a June IPO in Frankfurt, Bloomberg News reported.

Still, some firms are going ahead. On Tuesday, bakery firm Europastry announced plans for an IPO on Spanish stock exchanges. And CVC Capital Partners is planning to list Polish retailer Zabka Polska in September in an offering valuing the company at US$7.5 billion to US$8 billion, Bloomberg News reported.