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Brunello Cucinelli, an Italian maker of luxury cashmere sweaters worn by Prince William and James Bond star Daniel Craig, will close its initial public offering on Monday, a week earlier than anticipated, after unexpectedly high demand from investors.
The listing of a third of the company on the Milan exchange was more than 11 times oversubscribed in the first week of the offer period, according to people on the deal. It is expected to price at the high end of its proposed €6.75 to €7.75 range, valuing to company at about €500m.
The success of the Cucinelli flotation, the first IPO in Milan this year, underlines the strength of the European luxury goods industry thanks to demand from Asian and Latin American consumers.
Founded by its eponymous owner in 1978, Cucinelli reported a 19 per cent rise in sales to €243m in 2011 compared with a year earlier, of which about 70 per cent was made outside of Italy.
While Cucinelli is a small flotation it is expected that its success will encourage other Italian brands to consider the stock exchange as a route to boost funding as bank lending shrivels as a consequence of the impact of the eurozone debt crisis.
Forecasts of high growth of the luxury goods industry – where global sales are expected to rise by at least low single-digits this year – has also raised expectations of takeovers in the sector.
Investors from China and the Middle East in particular are scouting for trophy assets, such as well-known brands, according to bankers. Italy is home to many of the world’s best-known and last remaining independent fashion houses such as Giorgio Armani, Ermenegildo Zegna, Dolce & Gabbana and Versace.
Demand for the Cucinelli shares was equally strong from foreign institutional investors, especially from the US where Cucinelli makes half its retail sales, as well as Italian retail investors, according to those people familiar with the transaction.
The stock is due to start trading on the Milan stock exchange on April 27, sooner than initially expected.
Joint bookrunners are Mediobanca and Bank of America Merrill Lynch.