COACH to list shares in Hong Kong in a major positioning and awareness exercise
American premium leatherwear goods company COACH announced early this week it will list its shares on the Hong Kong stock exchange, in what seems to be a publicity stunt, as the company does not seek to raise new capital.
Unlike Prada’s planned Hong Kong IPO this summer and last year’s L’Occitane – Coach doesn’t plan to raise any new capital, which raises the question: is this publicity stunt worth the money and the effort The US retailer seems to think so. It believes it can lure both potential customers and retail investors. The strategy is an example of how Hong Kong’s market can serve as a platform for marketing, as Barney Jopson writes for ft.com.
Coach is particularly keen to tap the potential for “man bags” and accessories in China where it says men currently account for 45 per cent of luxury accessory and handbag spending. That’s a big contrast to the 25 per cent around Asia, and 15 per cent globally.
And there’s potential for healthy appetite for its shares in Hong Kong, where investors are keen to invest in foreign retail stocks that offer exposure to China’s growing luxury market. The country’s luxury good sector will be the fastest growing in China over the next ten years, CLSA has forecast and, according to the broker, Greater Chinese demand will account for 44 per cent of global demand by 2020. In a recent note on luxury, CLSA recommended investors buy Hong Kong listed retailers to gain “100 per cent pure exposure.”