InvestNow News 28th June – Morphic Asset Management – Prada’s devilish governance is out of fashion
June 26 2019
In the 2006 film The Devil Wears Prada, Meryl Streep plays a ruthless, cruel and demanding Editor-in-Chief of a high fashion magazine who would only be seen clad in the most-current luxury brands. For the non-fashionistas, Prada is a Milan-based luxury fashion house founded in 1913. Likely reflecting the brand’s popularity in Asia, in 2011 the eponymous family listed the Company in Hong Kong at HKD 39.5 per share. With proceeds of EUR 1.1bn, the family repaid significant indebtedness and the Company raised funds to grow its global store network. Following a weak debut, the share price quickly doubled to HKD 80 since when it has slid steadily to the current level of HKD 25, some 35% below its IPO price with a market capitalisation of HKD 64bn (EUR 7bn). Over the same period, European and Hong Kong equity markets have increased by over 40% and 25% respectively.
