Puig, the multinational fashion and fragrance company, is exploring the idea of going public through an initial public offering (IPO) as a way to navigate the challenges that may arise during generational transitions. CEO Marc Puig believes that introducing external investors into the ownership structure could help tackle issues such as difficulties in assuming leadership roles and a potential decline in enthusiasm.
In interviews with the “Financial Times” and “La Vanguardia,” Puig highlighted that family-owned companies sometimes face the risk of gradually losing their market position without internal awareness. On the other hand, being accountable to external investors can greatly impact a company’s trajectory.
However, Puig clarified that an IPO is just one of several options being considered, and no final decision has been made. The Puig family intends to retain majority ownership of the company regardless. Possible avenues for opening up the company’s capital include private equity investors, long-term shareholders, or entering the public stock market. Puig emphasized that maintaining the status quo is also a viable choice.
Looking towards the future, Puig pointed out that many leading companies in the luxury and premium beauty industry are family-controlled, citing LVMH and L’Oréal as examples. These firms have successfully balanced family-run operations with public ownership. Puig believes that luxury brands require a patient, long-term outlook, which family-run firms often possess, while public markets often prioritize short-term gains.
Puig also identified attracting, retaining, and inspiring talent, creativity, and innovation as the main challenges for the company. Puig competes with world-leading companies in its industry and must consistently strive to stay ahead.
Regarding financial leverage, Puig mentioned that the company has increased its debt in recent years due to its growth strategy. However, he assured that this does not hinder their ability to pursue further acquisitions, and bringing in external investors is not a requirement for expansion. Puig stated that their financial strategy remains conservative, and while they may have less flexibility compared to previous years, they continue to explore market opportunities.
As of the end of 2022, Puig’s debt stood at 1.6 times the company’s EBITDA, which amounted to 638 million euros. The company’s revenue outlook for this year is to surpass 4 billion euros, following a 40% increase in revenue from the previous year, reaching 3.62 billion euros.
Puig’s brand portfolio includes well-known names such as Carolina Herrera, Rabanne, Jean Paul Gaultier, Dries Van Noten, Nina Ricci, Byredo, Penhaligon’s, L’Artisan Parfumeur, Kama Ayurveda, Loto del Sur, Charlotte Tilbury, Uriage, and Apivita. They also hold licenses for brands like Comme des Garçons Parfums, Christian Louboutin, Benetton, Banderas perfumes, and Adolfo Dominguez.
In conclusion, Puig is contemplating an IPO as a means to address future generational transitions. While the benefits of opening up ownership to external investors are recognized, no final decision has been made. Puig remains committed to maintaining its position as a key player in the luxury and premium beauty industry and continues to prioritize attracting talent and fostering creativity and innovation. Despite an increase in debt, Puig’s financial strategy remains prudent, and the company is optimistic about its revenue outlook for this year.
