Borsa Italiana reaches out to fashion

Raffaele Jerusalmi, the straight-talking chief executive of the Milan stock exchange, has one of the tougher jobs in Italian luxury goods: convincing the owners of Italy’s myriad fashion and luxury companies to list on the stock exchange. Nevertheless, Mr Jerusalmi, who joined Borsa Italiana a couple of years ago after having been a head of fixed income trading at Credit Suisse, is aware of the odds.

Italy has by several measures a richer seam of luxury brands than anywhere in the world. A few companies – Luxottica, Tod’s and Salvatore Ferragamo – have been standout successes on the stock exchange. But mostly getting the family owners behind Italy’s brands to open their businesses to foreign investors and the rigours of quarterly reporting has been a hard sell.

Nonetheless, “that is going to change”, Mr Jerusalmi insists in his pared-back offices in the Fascist-era stock exchange that doubles up as a catwalk venue during Milan’s fashion weeks. Thanks to a combination of economic and generational factors and a new initiative at the stock exchange to bring entrepreneurs into its fold, 2013 could see a breakthrough.

“If 2013 goes well, we expect to see 10 to 15 stock market listings, of which the majority will come from the luxury and design companies,” Mr Jerusalmi says with a dry confidence.

Among those companies expected to hit the Milan bourse this year or next are down jacket maker Moncler, fashion handbags to lingerie company Carpisa-Yamamay and premier notebook maker Moleskine.

Moreover, Pambianco, the Italian luxury consultancy, in a recent presentation made with Mr Jerusalmi at the exchange says as many as 50 fashion and luxury brands, including Ermenegildo Zegna and Loro Piana, and 15 design and lifestyle brands, such as B&B Italia, are big enough to be listed.

Convincing entrepreneurs is not easy. Giorgio Armani is well-known for his opposition to a stock market listing. Mr Jerusalmi is also having to compete with exchanges in Hong Kong, where Prada chose to list, as well as London and New York.

However, the executive says the success of recent listings in Milan by Ferragamo in June 2011 and Brunello Cucinelli in April 2012, both of which have doubled or nearly doubled their share prices since flotation, has increased interest in a “Made in Italy” stock exchange debut. This is especially so since listing has become a marketing tool.

What’s more, over the past four years, the FTSE Italia personal goods index has grown 136 per cent compared with a 12 per cent fall in the FTSE Italia All Share index.

“The big surprise of the listing of Ferragamo was that it gave them a huge boost in their public profile, more than they expected,” says Mr Jerusalmi. Strikingly, more than 70 per cent of Ferragamo’s investor base is foreign institutions.

After long discussions with dozens of entrepreneurs, Mr Jerusalmi and his team have also launched a new venture Elite which he describes as something more like “social networking” for those many companies not ready to jump straight on to the exchange.

Mr Jerusalmi describes Elite, which handpicks participants for the three-year programme that helps them become more market friendly, as “a window” for companies to market themselves for a stock market listing but also to be seen as open to venture capital, private equity or private bond sales.

“This is for companies that want to grow because, in the end, they will need capital to do that,” he says. It’s all part of Mr Jerusalmi’s plan to make Milan’s stock exchange as much of a fashion destination as the city it’s in.

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