Dior Stock Out of Fashion as French Economy Sours
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PARIS — The gloomy economic climate threatens to take the gloss off classic French fashion house Christian Dior’s initial stock offering today, with analysts doubting that it will be the runaway success once envisioned by Chairman Bernard Arnault.
The prestigious fashion label, part of Arnault’s luxury goods empire, will come within reach of ordinary mortals when 1.92 million existing shares are offered on the Paris market and abroad for $74 (410 francs) each.
The shares, representing 6.10% of Dior’s capital, were formerly held by seven companies.
The establishment founded by Christian Dior, inventor of the postwar New Look, is only the second Paris fashion house to go public. It follows in the footsteps of Dior’s former protege, Yves Saint Laurent, who floated shares in 1989.
The offer is not as attractive as it seems. Although the Dior group includes haute couture, ready-to-wear and accessories, the stock offering excludes perfumes, the one sector of a fashion house that usually can be counted on to turn a profit.
Dior is looking healthy after using a capital increase to pay off debts and expects net profit to rise to $21 million (115 million francs) this year from last year’s $17 million (93 million francs).
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