Tuesday, 24 May 2011

Fact of the Day: IPO 2,180 times Oversubscribed

One of the outlets in Lan Kwai Fong
In a city filled with shops featuring top luxury brands, it's not unexpected to find second-hand designer shops in Hong Kong.

But how about one that just had its IPO with shares surging 65 percent on the first day?

It's called Milan Station with outlets around the city selling gently used handbags by Louis Vuitton, Gucci, Hermes and Chanel.

Inside there aren't plush interiors or staff wearing gloves to handle merchandise -- the bags are pretty much stacked in cubicles and the staff just greet customers as they come in.

Milan Station was started 10 years ago by former waiter and street hawker Byron Yiu Kwan-tat, but how he came to build up his store and expand so quickly is still a mystery.

What's also strange is that media report that some newer bags at designer stores can sell 10 percent higher at Milan Station, as the well-heeled can pocket a small profit just by buying the latest hot bag and then selling it to the second-hand store.

I thought people go to second-hand stores for a deal not a rip off?

In any event, the IPO did well yesterday, at one point up 77 percent, but closed at HK$2.77, 65.87 percent over the offer price of HK$1.67.

Before the IPO, the application was oversubscribed 2,180 times the amount allocated to the retail portion of the offering -- the largest oversubscription in a decade.

So what does Yiu plan to do with his hundreds of millions? Apparently to open 24 more shops in the mainland, including Beijing, Shanghai, Guangzhou, Chengdu and Hangzhou.

Sounds like Yiu may be onto bagging success -- we'll have to watch and see.

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