When a little more than two decades ago, entrepreneurs Alessandro Gallo and Francesca Rinaldo baptized their creature Golden Goose, they did not imagine how accurate that name would turn out to be. Their dirty and neglected-looking sneakers quickly established themselves as cult footwear and on June 21 they will hit the floor of the Milan Stock Exchange with a billion-dollar valuation.
The sneakers emerged far from the fashion capitals, in a small Venetian garage converted into a studio, and in a short time they revolutionized the market. Their creators managed to get thousands of users on both sides of the Atlantic, including numerous celebrities, to pay 400 to 600 euros to wear new sneakers that seem to have already been worn out from the factory and are even mended.
When the first Goldens saw the light, in 2000, the concept was new, with it they managed to distance themselves from the tastes of the majority and conquered a niche in the exclusive luxury sector. These famous sneakers, made by hand, with their characteristic hand-sewn incomplete star and inspired by the styleskaterhave undergone a meteoric expansion.
The company, owned by the venture capital giant Permira, announced this week the price range for its shares: between 9.5 and 10.5 euros. In this way, its capitalization will be in the range between 1,700 and 1,900 million. The owners, who will place 30% of the current share capital on the stock market, hope to raise around 558 million euros with the operation. It will represent the biggest debut on the Milan stock market since May last year, when the company that runs Italy’s lottery, Lottomatica, raised 600 million. The brand plans to use the proceeds to repay part of its debt of 480 million euros. In order to convince investors, the company offers them the candy of ambitious growth. The objective is to invoice 1,000 million euros in 2029, compared to 587 million in 2023.
Golden Goose has two hundred stores spread across 85 countries and has 1.5 million recurring customers, including celebrities like Taylor Swift. Its unique designs, without equivalents in the competition, and its co-creation model, which offers the consumer the option of customizing the product, make up its formula for success.
A own formula
Paola Cillo, professor at Bocconi University in Milan, believes that the brand has succeeded by offering customers a platform to express themselves. “Fashion brands, especially high-end ones, are linked to a somewhat outdated concept of imposing a style, a way of dressing, which is very often the vision of the designer who interprets the brand at that moment. “Golden Goose’s strength lies in offering consumers the ability to use the brand, its clothing and its sneakers to affirm their uniqueness,” she notes. The expert highlights that its offer is very different from that of the rest of the high-end brands. “Obviously, the product is beautiful and well made, like many creations made in Italy, but it is clear that this is not the distinctive element of Golden Goose, as it is not of any high-end brand. The distinctive element is what is inherent to the brand, the broken star, which shows the perfection of imperfection, and speaks of the beauty of being unique,” she notes.
Another of the brand’s strengths has been its ability to anticipate market trends, which have made sports shoes an increasingly present accessory in the wardrobe, also in contexts that in the past required more formal attire. . Professor Cillo points to studies by the consulting firm Bain & Company that indicate that, from 2010 to 2022, the sports shoe market grew at a constant annual rate of 20%, and has become the leading footwear segment during the last 14 years. “Golden Goose’s growth has certainly been linked to its intuition to focus its efforts on sports, its main identifier. Furthermore, the firm has transformed the concept of ‘looking good’ into the concept of ‘feeling good,’ explains Cillo.
The finances of the footwear firm, which throughout its history have practically only seen rise, are particularly attractive for investment funds, which have been entering and exiting one after another in the company’s capital. The majority have managed to make their investment more profitable and in less than five years.
The first to bet on used-looking sneakers was Dgpa Capital, which in 2013 acquired 75% of the company. The founding partners maintained a 25% stake in the company, then valued at 45 million. The speed of growth accelerated over the years, which attracted the attention of other investment funds. In 2018, the American fund Carlyle offered 400 million euros for the company.
From there begins a period of strong international expansion for the group. Diversification into other products such as clothing and accessories was already underway, but footwear continued to be the brand’s main asset and accounted for close to 90% of total turnover. During this period the founders leave the company.
In 2020, the Permira fund put a check for almost 1.3 billion on the table to acquire the firm. Analysts are generally optimistic about the stock market’s future. However, some point out certain weak points of the brand, and remember that the diversification of products it offers is still low, even though it is growing and its main offering, sports shoes, represents a large part of its income. On the other hand, it would be difficult to think about very high growth, since, as Fitch Ratings points out, for Golden Goose selling more could be counterproductive and compromise “the positioning of the brand, which is based on the concept of scarcity, craftsmanship and a limited number of models. Cillo also puts other challenges on the table: improving the company’s governance and educating investors about volatility in the luxury business.
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