Pricey Prada is aiming to raise £1.5 billion in Hong Kong float

Prada is set to be valued at a significant premium to its listed luxury rivals when the Italian fashion house floats in Hong Kong later this month.

The company, which also owns the Miu Miu label and Church's shoes, today began meetings with Asian investors as it looks to raise up to
$2.6 billion (£1.58 billion).

Prada, a favourite of both fashion editors and celebrities including Keira Knightley and Carey Mulligan, plans to sell 423.3 million shares, 16.5% of its enlarged capital, and is believed to have set a price range for the public offering of between HK$36.50 (£2.85) and HK$48 apiece.

This would value the company at over $12 billion. Prada has the option to sell an additional 63.49 million shares if demand is strong.

Prada launched bookbuilding for institutional investors today ahead of its plans to list on the stock exchange on June 24. This is Prada's fourth attempt in a decade to go public.

The move values Prada at 27 times its forecast earnings. British fashion house Burberry, which has been boosted by bid speculation recently, trades at 22 times forecast 2011 earnings, while LVMH, the conglomerate which owns labels including Marc Jacobs and Celine, trades at 19 times earnings.

"Twenty-plus times PE [price to earnings ratio] looks expensive," said Peter Elston, a strategist at Aberdeen Asset Management Asia. "But luxury goods companies such as Prada have got good, visible top-line growth for the next 20 years.

There are high barriers to entry as you can't go out and create a luxury brand from nothing."

Miuccia Prada and her husband and business partner Patrizio Bertelli will still own the majority of the stock.

Prada is both the first Italian and high-fashion company to float in Hong Kong. The move will help its expansion in Asia, where demand for luxury goods is booming.

On Friday, the group predicted that it would make a profit of at least 150.7 million (£134.3 million) for the six months to the end of July, and unveiled ambitious growth plans which would follow the share issue.

Miuccia Prada, who was once a member of the Communist Party, is regarded as one of fashion's greatest innovators. She inherited her family's struggling leather goods business in 1978 and swiftly turned it into one of Milan's most loved fashion houses.

Miu Miu was launched in 1992 as the edgier little sister label; its fans include Jessica Alba and Hailee Steinfeld, the True Grit star who recently became the face of its new campaign.