The move had been awaited for more than one year. Having finally obtained the green light from the watchdog authorities of the Milan Bourse, Mario Moretti Polegato announced last week the flotation of his fast-growing footwear group. The roadshow for the analysts started yesterday, but while some Italian newspaper reports have placed at over €1 billion, the valuation of Geox will only be known on Nov. 28, after the management replies to many questions about the future potential of the company.

The public offering will start on Nov. 15, with institutional investors due to take up 75 percent of the shares, and it will end on Nov. 26. Trading in Geox’ shares is set to begin on Dec. 1. UBM and Merrill Lynch International are joint global coordinators. Banca IMI is co-global coordinator. Banca IMI and Efibanca are joint lead managers of the operation and Lazard & Co. has been appointed as advisors.

Moretti Polegato, the charismatic CEO of Geox, who took over his brothers shares a few weeks ago, will see his own stake, held through a company called Lir, decline to up to 71 percent. He wants to place on the market 25 percent of Geox’ equity, rising to 29 percent in the case of the full exercise of a greenshoe allotment option. In the latter instance, Moretti Polegato will sell 56.5 million shares, accompanied by 8.5 million new shares coming from an equity increase. Institutional investors will have to subscribe to a minimum of 750 shares. Out of the 16.2 million shares offered directly to the public, 375,000 have been reserved for Geox’ employees.

Precise figures for the company’s results could not be obtained, but company executives indicated that its net income reached €56.3 million in the first nine months of this year on 32.4 percent higher revenues of €314.5 million, although cash flow was negative at 39.7 million as of Sept. 30. In comparison, the available figure for all of 2003 showed a net income of €30.7 million for a turnover of €254.1 million.

The management wants to take the proportion of foreign sales beyond 50 percent next year. In the latest 9-month period it stood at 44 percent, up from 37 percent in 2003. Total orders are up 38.7 percent from a year ago. For the next few years, the company is forecasting sales growth of 10-15 percent on the domestic market and 100 percent on other European markets. Sales are still low in the USA, China and Japan, but are expected to make a significant contribution to the total turnover by 2006.

In the first half of 2004, Geox’ operating margin represented 11.51 percent of turnover – less than what had been previously reported. The brand tends to invest 10.5 percent of sales on marketing and communication, which is very high by Italian standards in the footwear sector. Many articles have appeared in the international press about the extraordinary success of Geox’ “shoe that breathes” in only 12 years of existence, overshadowing the scant publicity about the partial legal claims of a French inventor, Stanislas Graire, who plans to develop a similar shoe model with a large unnamed American group.