Fashion world looks to Burberry for signs of investor confidence
The market's reaction to the offering is widely seen as a barometer of investor confidence in the luxury goods sector, which has been hard hit in recent months by sluggish demand as well as wider events such as the WorldCom scandal. It will also be the fashion industry's first major Independent Public Offering since last month's high profile decision by the Italian fashion house, Prada, to postpone its own flotation.
Burberry’s parent group, GUS, has indicated a price range of between £2.30 ($3.50) to £2.90 ($4.50) per share, valuing the company at between £1.15 billion and £1.45 billion. This compares to a value of between £1.2 billion and £1.8 billion when GUS first announced plans for the flotation 18 months ago. Shares approximating to 25% of the company's total value will be offered.
