Graff to open Shanghai outlet this year
Source: Bloomberg News |
May 19, 2012, Saturday
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Print Edition
Print Edition
GRAFF Diamonds Ltd, the London jewelry retailer that's planning a US$1 billion Hong Kong initial public offering, will open five new stores in Asia this year to tap demand for luxury goods in the region.
Graff, which has 18 stores globally, including one in Beijing which opened last year, plans to add new stores in Shanghai, Hangzhou, Hong Kong and Tokyo, Graff said in a filing to Hong Kong's stock exchange yesterday. Chinese consumers account for about 20 percent of global spending on luxury goods and will make Asia the fastest growing market for luxury goods in the world, the filing said.
Graff may offer its shares in a range of 18 to 24 times estimated 2012 earnings, or HK$25 (US$3.22) to HK$37 apiece, to raise as much as US$1 billion, three people with knowledge of the matter said. About US$850 million of the funds raised will go to Graff, and another US$150 million to selling shareholders, the people said.
"The valuation looks rather high, investors could have a lot of choices at such multiples," said Edwin Fan, an analyst at BOC International Group. "Graff doesn't have a very high penetration in China. It is not the perfect time to price such an expensive IPO."
In the proposed range, Graff's valuation would be similar to that of Prada SpA which is trading at about 21 times estimated earnings for the year ending January 2013, data showed. The Italian fashion house is up 11 percent from its June 2011 IPO, which raised US$2.5 billion.
Graff, which has 18 stores globally, including one in Beijing which opened last year, plans to add new stores in Shanghai, Hangzhou, Hong Kong and Tokyo, Graff said in a filing to Hong Kong's stock exchange yesterday. Chinese consumers account for about 20 percent of global spending on luxury goods and will make Asia the fastest growing market for luxury goods in the world, the filing said.
Graff may offer its shares in a range of 18 to 24 times estimated 2012 earnings, or HK$25 (US$3.22) to HK$37 apiece, to raise as much as US$1 billion, three people with knowledge of the matter said. About US$850 million of the funds raised will go to Graff, and another US$150 million to selling shareholders, the people said.
"The valuation looks rather high, investors could have a lot of choices at such multiples," said Edwin Fan, an analyst at BOC International Group. "Graff doesn't have a very high penetration in China. It is not the perfect time to price such an expensive IPO."
In the proposed range, Graff's valuation would be similar to that of Prada SpA which is trading at about 21 times estimated earnings for the year ending January 2013, data showed. The Italian fashion house is up 11 percent from its June 2011 IPO, which raised US$2.5 billion.
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