Taylor Swift favorite Golden Goose postpones IPO due to political upheaval in Europe

By Louis Goss

Sneaker brand beloved of the pop-music icon and other celebrities has targeted a market cap verging on EUR2 billion

Golden Goose, the Italian fashion brand that makes the scruffy sneakers worn by Taylor Swift, has postponed its initial public offering in response to a "significant deterioration in market conditions," driven by political upheaval in Europe.

"The significant deterioration in market conditions following European parliamentary elections this month and the calling of a general election in France have impacted European markets performance and, in particular, the luxury sector," Golden Goose said in a statement.

"Management and shareholders have always been determined to ensure a successful IPO for all stakeholders, with strong and sustainable aftermarket performance, and believe the current market backdrop is not the right environment to take the Company public," the firm added.

The European parliamentary elections, which took place June 6-9, saw a major swing toward the right-wing European Conservatives and Reformists, or ECR, bloc, which is currently led by Italian President Giorgia Meloni.

The ECR, which is made up of right-wing parties from across Europe including Poland's Law and Justice, Spain's Vox and Alternative für Deutschland split-off group Wir Bürger, won 76 out of 720 seats, making it the European parliament's fourth-largest political bloc.

In response to a major upsurge in support for Marine Le Pen's right-wing National Rally party in the European elections, President Emmanuel Macron subsequently called a snap general election in France, which is scheduled to take place across two rounds on June 30 and July 7.

European markets have reacted negatively to the upheaval, in a shift that has seen the London Stock Exchange recapture its position as Europe's biggest equity market due to a drop in the value of stocks on the Euronext Paris exchange.

The CAC 40 (FCE00) index of France's top stocks is down more than 3% since Macron on June 10 called his snap election, paring its year-to-date gain to just 0.6%. That makes the index a clear underperformer in what has been a mostly solid year for European stocks, with the Stoxx Europe 600 XX:SXXP up 7.3%, according to FactSet. The FTSE MIB Italy index IT:I945 is down 3.3% since June 10 but is up 9.9% to date in 2024.

Golden Goose had planned to launch an IPO on the Euronext Milan stock exchange on June 21, in what was set to be Italy's biggest public float since Apollo-backed gambling company Lottomatica raised EUR690 million in May 2023.

The Italian-based casual-shoe maker, acquired by private-equity firm Permira in 2020 for EUR1.28 billion ($1.37 billion), had set its price range at EUR9.50 to EUR10.50 per share, implying a Golden Goose market capitalization of between EUR1.69 billion and EUR1.86 billion.

The celebrity favorite, whose shoes have also been worn by A-list celebrities including Selena Gomez and Reese Witherspoon, had planned to sell a 30% stake in itself for up to EUR558 million, including to Invesco, which had already agreed to purchase EUR100 million in Golden Goose shares.

From the archives (May 2024): Italian fashion brand Golden Goose books higher revenue amid tough environment

-Louis Goss

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06-19-24 1834ET

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