Spanish beauty conglomerate Puig, known for its ownership of brands such as Charlotte Tilbury, Paco Rabanne, and Byredo, is contemplating a multibillion-euro Initial Public Offering (IPO) to attract fresh capital while maintaining family control. This decision is currently in the "reflection phase", according to the company's Chair Marc Puig.
The potential IPO comes as an approach to enforce market discipline and prevent common pitfalls in family businesses, Marc Puig suggested. This strategy would follow the footsteps of other luxury brands like Ermenegildo Zegna, Hermès, and Prada (OTC:PRDSY). However, the final decision on the IPO has not been made yet.
Rumors emerged in September about Goldman Sachs (NYSE:GS) and JPMorgan (NYSE:JPM) being consulted for potential IPO advice. Unlike Puig, many of its competitors, including L’Oréal, Estée Lauder, Coty (NYSE:COTY), LVMH, and Kering (EPA:PRTP) are publicly traded entities.
Despite a global downturn in luxury spending reflected in LVMH's slowing sales growth, Puig is optimistic about surpassing its self-imposed 2025 sales goal of €4.5 billion this year itself with projected sales of over €4 billion. The company's estimated worth is between €8-€10 billion.
In recent years, Puig has diversified its portfolio with 10 acquisitions including Jean Paul Gaultier high heels, and acted as a manufacturer of fragrances under license. This expansion strategy has resulted in significant debt. However, the company's strong brands provide high EBITDA margins (2022 EBITDA: €638mn) and ample cash flow for financial resilience.
The Barcelona-based group has also strengthened its position in the Indian beauty and personal care market by increasing its stake in Kama Ayurveda. The possible IPO could involve a private equity shareholder or align with the "affordable luxury" segment.
While contemplating this major decision, Puig also faces the challenge of attracting and retaining talent in competition with globally renowned companies.
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