UPDATE 1-Cucinelli stellar debut boosts Italy IPO appeal

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Fri Apr 27, 2012 12:04pm BST

(Adds founder, bourse quotes, background)

* Shares rise more than 30 pct

* IPO priced at top of the 6.75-7.75 euro range

* Milan stock market hopes to lure more listings

By Michel Rose

MILAN, April 26 (Reuters) - Italian cashmere specialist Brunello Cucinelli (BCU.MI) made a sparkling market debut in Milan on Friday, buoyed by seemingly insatiable demand for European luxury goods stocks that have shrugged off double-dip recessions on the continent.

Cucinelli's initial public offering (IPO) was seen by the crisis-hit Italian bourse as a welcome boost, hot on the heels of Ferragamo's (SFER.MI) flotation last year and the loss of fashion house Prada (1913.HK) to an Asian listing in 2011.

"I think the success of Ferragamo and Cucinelli will convince other Italian luxury companies to list in Milan, maybe this year, but more probably next," Raffaele Jerusalmi, chief executive of Borsa Italiana told Reuters at the launch ceremony.

Italian investors like to point out that Prada's stock is up 29 percent since its June 2011 listing in Hong Kong, underperforming Ferragamo whose shares have soared almost 90 percent since its Milan listing at about the same time.

The fact that Asian investors have to pay Italian taxes on their Prada holdings has reduced its appeal, analysts say.

"Milan's only competitor in the luxury sector is Paris. We're sorry about Prada. We're trying to convince them of the benefits of a dual listing, it's still possible," Jerusalmi said on the 1930s exchange, where bags of Mongolian cashmere wool adorned the former trading floor.

A Milan-based analyst doubted this could be the start of a series of Italian IPOs, however.

"There are very few thinking about it, there's no stock exchange culture in Italy and luxury companies are mainly family held," he said. "The quantity IPOed by Cucinelli was very small," he added.

Shares in the Umbrian maker of high-end cashmere jumpers worn by Prince William soared 35 percent at 10.5 euros by 0945 GMT, above the 7.75 euros at which it priced its share sale, the very top of its indicative range.

The IPO raised 158 million euro ($208 million) from international investors but also from well-known Italian fashion names such as Benetton BNG.MI, which is delisting from the Milan stock market, and menswear maker Ermenegildo Zegna. [ID:nL5E8FOFPX]

European luxury makers have fared better than other industrial players during the euro-zone debt crisis, as they rely on new-money Asian buyers travelling the world.

ENLIGHTENED CAPITALISM

The company, which was founded by university drop-out Brunello Cucinelli in 1978, said earlier this week the offering for about a third of its shares was 17 times oversubscribed, leading it to close the books earlier than planned.

Son of a farmer, 58-year old Cucinelli is anything but an orthodox capitalist. He has turned the mediaeval village of Solomeo, in the central Umbria region, into a factory where workers do not punch a time clock and lunch breaks are long.

"This listing shows that romanticism and enlightenment are compatible with a humanist form of capitalism," he said at the ceremony, before presenting Jerusalmi with a 16th-century edition of Aristotle's best-known work on ethics, Nicomachean Ethics.

"It also shows we're a serious country, we have international credibility," he added.

Cucinelli posted 2011 net sales of 243 million euros and core earnings of 40 million.

Bank of America Merrill Lynch (BAC.N) and Mediobanca (MDBI.MI) are global coordinators on the deal.

For a recent story on Cucinelli, click on [ID:nL6E8FGCXL]

($1 = 0.7585 euros)

(Additional reporting by Jennifer Clark; Editing by David Cowell)

((michel.rose@thomsonreuters.com)(+393400575240)(Reuters Messaging: michel.rose.thomsonreuters.com@reuters.net)(Twitter: @MichelReuters)) Keywords: CUCINELLI IPO/

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