Tumi Successfully Goes Public
Tumi went public on the New York Stock Exchange on April 19 and was very successful in their public offering raising $338 million. WWD cites a boost in the strength of the luxury sector for their success as well as an upswing in tourism- something very lucrative for a luxury luggage brand whose travel products make up 46% of their net sales. And when those travel products range in price from $295 for a woman's fabric tote to $995 for a deluxe wheeled leather brief with laptop case, as Martha Stewart says, that's a good thing.
As I mentioned yesterday, the latest trend in fashion has nothing to do with clothes and everything to do with Wall Street. Every designer these days seems to have the itch to go public and for good reason. So far, fashion houses’ public offerings have proved to be very profitable. Luxury Italian retailer Prada successfully did so during June 2011 in Hong Kong when their offering raised $2.15 billion for the brand. Another luxury Italian designer, Ferragamo, also went public during June 2011 in Milan raising $487.1 million. Most recently, American designer Michael Kors’ IPO during December 2011 on Wall Street raised $944 million while shares of Michael Kors Holdings, Ltd., which, were priced at $20 each, have doubled since their debut.
Up until the Fashion Law Institute's Spring Symposium FASHION = ART + COMMERCE on Friday, I was not terribly familiar with IPOs and fashion. However, the panel enlightened me on the subject and I will be talking about this more in-depth in the coming weeks as I read up on it and become further educated. I can say that this type of public offering is a very new trend. Historically, fashion has flirted with the idea of Wall Street in the past however, those companies that took the risks did not always live up to investor expectations. The few houses that do decide to take the plunge did so with varying outcomes. But, that was then. With the booming markets in emerging economies like the BRIC countries (Brazil, Russia, India, China) as well as the continued success of the luxury retail Asian market, designers are deciding going public is worth the risk. Tumi, the upscale luggage and accessories producer, is apparently no exception.
Continue to follow Neon Esquire as I explore the pros and cons of taking fashion design houses public.