Dec 3, 2009
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Retail sector IPOs end Paris, Milan bourse drought

Dec 3, 2009

By Lionel Laurent and Jo Winterbottom

PARIS/MILAN, Dec 3 (Reuters) - Paris and Milan got a retail sector boost on Thursday, as the listing of online fashion retailer Yoox (YOOX.MI) and PPR (PRTP.PA) subsidiary CFAO (CFAO.PA) ended IPO droughts of around two years in both cities.

Africa-focused retailer CFAO was the first major IPO in Paris since Bureau Veritas (BVI.PA) went public in 2007, while Yoox is the first company to list on Milan's main MTA market in 20 months.

Europe's IPO market has lagged Asia and the United States this year, with volumes of $741 million in the first three quarters dwarfed by Asia's $35 billion and less than one-tenth of U.S. volumes.

The fourth quarter has seen a pick-up, however, with $4.1 billion of IPOs in Europe up to early November, according to Thomson Reuters data.

Shares in CFAO, valued by the market at 1.7 billion euros ($2.57 billion), rose 5 percent in early trade, while Yoox, with a market cap of 245 million euros, surged 15 percent -- although both performances were good for the sector, analysts said.

"CFAO is more diversified (than Yoox) and they are focused on particular sectors, such as automobiles in Africa as well as pharma retailing," said Equita SIM analyst Fabio Fazzari.

Yoox, meanwhile, sells fashion clothes and accessories online and operates the retail websites of designer brands such as Emporio Armani, Valentino and Marni.

The fact both were outperforming showed the retail sector was benefiting from early positive news from volume trends and an easy year-on-year comparison base for 2010.

"It's a good moment for the retailing business," he said.

At 1216 GMT, shares in Yoox were up 14.5 percent at 4.92 euros, while CFAO was up 4.8 percent at 27.24 euros, outperforming a 0.4 percent gain in the DJ Stoxx retail index, as well as the broader FTSE Eurofirst 300.


The strength of demand for Yoox over CFAO stock on their first day of trading mirrors the interest shown at subscription earlier in the week.

PPR said on Wednesday it had raised 806 million euros from listing slightly more than half the equity of CFAO, which is mostly exposed to African markets and the autos sector.

The IPO was 2.5 times oversubscribed and priced at 26 euros per share, slightly below the mid-point of an indicated price range of 24.80 to 29 euros.

Yoox, however, enjoyed a stronger reaction to its IPO, which was priced at 4.3 euros, towards the top end of the indicated 3.6 to 4.5-euro range.

A Paris-based trader said he thought CFAO's growth potential was "limited" and that its Africa focus was not as exciting as exposure to Asia such as India or China. ($1=.6617 Euro) (Editing by by Marcel Michelson and Simon Jessop)

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