Dolce&Gabbana’ ipo is potentially valued at 6 billion euros

It is a prominent Italian fashion brand that might go public in the future. Like Giorgio Armani, Dolce&Gabbana has been associated with the possibility of being listed on the stock market. The company is «estimated to be worth approximately 6 billion euros, which is four times the revenue of 1.59 billion euros recorded at the end of March 2022/2023 fiscal year». A market analyst, along with other experts, has shared a possible image of the Maison’s future listing, confidentially with MFF. During the MFGS-Milan fashion global summit 2023, Alfonso Dolce, ceo of Dolce&Gabbana, founded by Domenico Dolce and Stefano Gabbana in 1985, stated that the company is considering a future listing on the Italian stock exchange, backed by new investments in the beauty and real estate sectors (see MFF of October 26).

«Dolce&Gabbana is one of the top Italian luxury brands in the world. The relevance of listing is certainly more significant nowadays than in previous years», as confirmed by Vitale’s managing partner, Alberto Gennarini. «High-end brands such as Moncler, Prada, Lvmh, Kering and Hermès are listed with remarkably high multiples», he continued. «Giorgio Armani has recently revised its bylaws, paving the way for a potential listing in the future pending certain events», he added, noting that Dolce&Gabbana’s latest financial statements exhibit substantial growth, with revenue increasing from 1.25 to 1.59 billion euros and ebitda reaching 73.2 million euros. «We hope for the listing of the Group in the near future, which would be a significant accomplishment for one of Italy’s foremost luxury brands», Alberto Gennarini concluded.

According to Emanuela Pettenò, consumer markets and deals markets leader at PwC Italy, listing a fashion company today presents numerous opportunities. Looking at recent Italian company examples such as Moncler, Brunello Cucinelli and Ermenegildo Zegna, going public has facilitated numerous opportunities. This includes financing growth through internal and external funding options, expediting the expansion of retail developments, enhancing competitive abilities and bargaining strength during negotiations, as well as augmenting visibility and status both domestically and abroad. More generally, Pettenò explained that diversifying sources of financing can have additional benefits such as attracting qualified talent and resources to ease generational transition, retaining key employees using share-linked incentives, and increasing credibility by having qualified investors in the shareholding structure. «Luxury companies are attractive to investors because they are perceived as less risky. This is due to their steadily growing target markets and strong profits, as well as their ability to pass on cost increases to prices», the PwC expert noted.

The market context and historical moment hold significance as demonstrated by the successful launch of Birkenstock, a profitable company in the midst of a global economic downturn. Lvmh’s stocks have been impacted by some skepticism, partially due to a slower recovery in China and the US slowdown. Against this backdrop of uncertainty, it is reasonable to assume that companies considering an ipo will prepare for the process in advance and wait for a more favorable market window. Investors will increasingly prioritize company fundamentals, and luxury companies are generally well-positioned in the current rising-rate environment due to strong liquidity, high cash flow, and self-financed growth that demonstrates capital strength providing protection. Returning to Dolce&Gabbana, the expert suggests that going public will enhance the brand’s image and provide access to new capital for sustained growth. «The recent investments in beauty (in-house, ed.) and in the real estate could trigger a new growth cycle and offer an interesting equity story for the market», the expert concluded. (All rights reserved)