Milan bourse aims to become luxury-goods hub
(By Gordon Sorlini) (ANSA) – Milan, November 27 – Milan, already a global powerhouse in fashion, is becoming a hub for financing fashion, too. This is no coincidence. During a presentation on November 21, Raffaele Jerusalmi, chief executive of the Milan Stock Exchange, said the bourse was moving to increase its appeal to fashion and luxury-goods firms looking to raise capital through the stock market. “Over the past four years, about 50% of the listings of fashion and luxury-goods firms in Europe, the Middle East and Africa (EMEA), in terms of market capitalization, have taken place in Milan,” Jerusalmi said. Over the past two years luxury brands like Brunello Cucinelli and Salvatore Ferragamo have made their (very successful) stock-market debuts here. High-end outerwear maker Moncler is due to list in early December.
The challenge now, he said, is to reach beyond national borders and turn Milan into an “international hub”, attracting listings from fashion and luxury-goods makers from other countries.
Competition isn’t lacking. Paris and New York, the other two fashion powerhouses, have well-developed financial-services sectors catering to the industry’s needs. Milan, however, has some aces up its sleeve.
First of all, Jerusalmi said, it has the highest concentration of luxury goods and fashion brands in the world, including suppliers (Italian and foreign) who work for these brands.
The executive also pointed out that the Italian bourse is the most international of the European exchanges in terms of investor base – even more than its parent company, the London Stock Exchange.
While about 35% of trades originate in the UK, Jerusalmi says many of these could be orders placed by subsidiaries of non-UK financial firms.
Another 35% originate in the US and the remaining 30% originate from other countries, including Japan, Korea, India and Canada. The exchange works hard to promote listed firms, helping them gain international visibility. “Roadshows of listed companies have been organized in Europe, Asia, on the east coast of the US and Canada and in the future we could plan to approach the Brazilian market and the west coast of the US, probably San Francisco and Los Angeles,” Jerusalmi said.
The Milan stock exchange offers other, important, advantages. According to Jerusalmi it is the most efficient exchange in Europe and one of the most efficient in the world. Transaction costs, from order placement to trade execution, are about 50% those in Germany and France.
Successfully drawing more fashion and luxury-goods firms to list in Milan should lead to the creation of a virtual, self-propelling cycle, he says.
For example, more listings translate into more analysts covering listed stocks which leads to a greater concentration of industry knowledge, which will draw more investors and, consequently, more firms to list, he says.
However, the stock exchange is also working on another track it calls the Elite program, one which aims to create a pipeline of potential listing firms. “The point of Elite,” Jerusalmi said, “is to create links between small- and medium-sized enterprises, investors, banks and the stock exchange”.
As part of Elite, companies can join the roadshows that Borsa Italiana organizes around the world, where enrolled firms’ management can present their companies to the local financial communities and network. The program is currently tailored to smaller companies, but Jerusalmi said Borsa is working on creating an Elite program for big companies, with revenues topping one billion euros, to be launched soon. “We have a very rich pipeline of enrolled firms, 131 so far,” Jerusalmi said, adding that fashion and luxury-goods makers make up the largest component so far.