Distressed IPOs

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Katie Martin (0:37)

Pushkin.

So deals, think big mergers, think companies listing on stock markets. This is the sexy stuff, right, of investment banking. And they're back, sort of. We saw some mega deals come through in the first quarter, but it hasn't been plain sailing since. We've seen some big deals ball over horribly, much embarrassment all round. So today on the show, we're going to be asking, is it for real this time? Plus, who killed the Golden Goose?

This is Unhedged, the markets and finance podcast from the Financial Times and Pushkin. I'm Katie Martin, a markets columnist here at the FT in London. And I'm joined by the man at the FT who we affectionately call JFK, James Fontenella-Khan. James, you love your deals.

James Fontanella-Khan (1:25)

I do, at least when they're there.

Katie Martin (1:28)

So welcome back to the show, although you've been on before, but tell me before we get into the meat of this, what is the favorite deal you've ever written about?

James Fontanella-Khan (1:37)

I hadn't thought about that.

I wouldn't say my favorite, but the most significant one was the one when the FT got acquired by Nikkei. There's nothing quite like reporting about your own company getting acquired. You kind of suddenly understand how meaningful it is to the people who are kind of living it. And so whenever I report about an M&A deal now, I kind of think about, oh, what are the people working there that they're going to think about it?

Katie Martin (2:05)

What about those humans who work there? Yeah, no, it's a very good point.

James Fontanella-Khan (2:10)

It humanized it for real.

Katie Martin (2:11)

That was a very strange time. Yeah, yeah.

Okay, so that was ages ago. That was 2015 So let's talk about what's going on now. Golden Goose enlightened me. They make rubbish looking trainers that cost lots of money, yes?

James Fontanella-Khan (2:25)

Absolutely, bankers love them.

Katie Martin (2:27)

They must be terrible.

James Fontanella-Khan (2:29)

Yeah, that midlife crisis kind of acquisition.

Katie Martin (2:32)

Right, so they retail for about, what, 500 euros? Hundreds of dollars a pop, these trainers, and they look like they've already been worn for months.

James Fontanella-Khan (2:41)

Exactly, you can't be bothered to kind of actually wear them and get them to that stage, so they do it for you.

Katie Martin (2:47)

I've got a house full of rubbish looking trainers, if anyone would like them.

James Fontanella-Khan (2:50)

Could be the next millionaire, but don't IPO.

Katie Martin (2:54)

So no, do not do an initial public offering. Do not list on the stock market, because the whole point was it's owned by one of these big, fancy private equity companies, right? And the big, fancy private equity company was about to list it in Milan.

And then at the very, very last minute said, no dice, not going ahead. What's going on there, JFK?

James Fontanella-Khan (3:11)

A number of factors. If you step back to kind of the luxury kind of market for shoes and just kind of clothing in general, hasn't been doing great. Take Moncler, another kind of Italian company, hasn't been doing very well. The biggest issue, I was actually in Milan recently, and I was talking to some of my friends who operate in that sector is like one of the key markets has somewhat disappeared, and that's China. So sales from China have gone down significantly.

And so investors are not that excited about luxury companies at the moment, especially in the clothing sector.

And yeah, and so Premier, you were mentioning the private equity company that owns Golden Goose, had already one bad experience with Dr. Martin's, the kind of fashionable UK brand. They listed, I think, in 2021, and it did not go well. And so they wanted to avoid...

Katie Martin (4:07)

The market does not like Dr. Martin's.

James Fontanella-Khan (4:09)

Yeah, that's a pity. There's a dissonance between the market and the people who actually wear the stuff.

Katie Martin (4:16)

Yeah, I love my DMs, and it's like strong mum energy, whereas Golden Goose are strong Taylor Swift energy, right? She has been seen, St. Taylor of Swift has been spotted wearing these shoes. So the kind of assumption was this thing is going to go fine.