Diesel Jeans Hong Kong

Forget Prada, here's the way to buy Italy in China

Forget Prada, here�s the way to buy Italy in China

Commentary: Invest in Chinese firms that own rights to Italian brands

By Ben Weiss

Last Update: 3:32 PM ET Jun 17, 2011

HONG KONG (MarketWatch) � My 86-year-old grandfather once remarked to me that you know you are in the best of times �when even the donkeys start dancing on the ice.� I would be totally amiss to somehow connect investment bankers with donkeys, but their attempt this week to hoodwink investors into buying into the Prada IPO at stratospheric valuation multiples had all the probability of success as that of an ice-skating donkey trying to land a perfect double axel.

In the end, it is just a flurry of broken ankles.

From Marco Polo to Prada

The direct link between Italy and China began as early as the 13th century when the Venetian-born explorer, Marco Polo, traveled through China, returning to Italy with a sample of oriental delights, tucking in his bag a few Chinese long noodles, which legend credits as the start of the Italian obsession with pasta.

Almost 800 years later, we see the reverse, a Chinese romanticism with Italian brands, and the talk today is of Prada , the first Italian company to be listed in Hong Kong. It has fumbled its way over the line to raise $2.1 billion � banking on the assumption that the locals who are prepared to pay $2,495 for a leather tote bag could be lulled into paying a lofty valuation premium for the shares too. And it worked.

At the final offer price, investors are paying HK$39.50 per share for a company with just HK$2.31 in net tangible assets � translating to a �brand value� of U.S. $12 billion for the 98-year-old luxury house. That is, for a brand valued in its own books at just $1.2 billion, investors have agreed to pay 10 times as much, and it has been steadily impairing for the past three years. In 2008, Interband valued the Prada brand at $2.8 billion.

But Prada is riding the Asia growth story and a sector M&A wave that has seen Louis Vuitton gobble up the Italian jewelry house Bulgari, and a 20% stake in Hermes during the past year. The Prada brand is strong, commanding a premium � no better example of its brand extension than when it teamed up successfully with LG to sell �Prada� mobile phones � a far cry from its first incarnation as a leather shop run by two Milan brothers in 1913.

Consumer Goods More Expensive in Korea Than Abroad Diesel Jeans ...

A survey of prices of 22 consumer goods in 11 countries shows that 12 items cost more in Korea than the international average, the Korea Consumer Agency said on Tuesday. The survey compared the prices of consumer goods in Seoul, New York, London, Paris, Tokyo, Hong Kong, Singapore and Taipei on Feb. 21-25.

Pork is the most expensive in Korea. If the price of bacon here is set at 100, it is a mere 26 in Germany, 29 in Italy, 42 in Taiwan, and 82 in notoriously pricey Japan. By the same token the garlic price index is 17 for Hong Kong, 25 for Singapore, and 49 for Taiwan, but 144 for Japan. Sirloin is 26 in the U.S., 37 in Canada, Cheap Diesel Jeans online 40 in Germany, and 42 in the U.K, with higher prices only in Hong Kong (148) and Japan (130). The price of blue jeans is 59 in the U.S. and 60 in the U.K.

The agency will submit guidelines for improvement based on the survey to government agencies, including the Fair Trade Commission. It plans to expand the scope of the survey to 50 consumer goods.

But basic consumables are cheaper in Korea, with instant noodles costing 46 percent less than the average in the countries surveyed. Flour, kerosene, onConsumer Goods More Expensive in Korea Than Abroad Diesel Jeansions, sugar, cooking oil, toilet tissue, milk, bread, and LPG are also cheaper.

The price differences are attributed the retail systems, productivity and consumer preferences. The consumer watchdog blamed the high price of jeans here on hefty profit margins in the distribution chain.

Monopolies and oligopolies by a small number of conglomerates are another reason for the high prices. Four domestic oil refineries account for a whopping 74 percent of the diesel and gasoline markets, four firms hold 75 percent of the detergent market, and three manucturers account for about 93 percent of the feminine sanitary products market.

Korean consumers pay more for pork than those in the G7 nations and neighboring countries. The prices of garlic, beef and blue jeans in Korea are also much higher than abroad.

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