TheChek News Flow

Buyout group’s last-minute decision not to list high-end footwear brand followed fractious talks with advisers

Bankers were adamant Golden Goose, the maker of the €500 distressed-look trainers favoured by Taylor Swift, was ready to become a public company.

After more than 10 months of preparation, the Italian footwear brand was seeking to raise about €600mn in a Milan listing as early as Friday. It had reported strong first-quarter sales. No less than seven banks had been building its IPO book, which was by Tuesday oversubscribed. Fund manager Invesco had agreed to be a cornerstone investor.

But Francesco Pascalizi, the dealmaker in charge of the investment at private equity owner Permira, suddenly got cold feet.

Permira’s decision to pull the highly anticipated listing late on Tuesday shocked advisers and investors that had committed to the fundraising. It dealt a blow to the tentative recovery of Europe’s IPO market, and more companies that had been planning a listing this year may now err on the side of caution and put off their plans in the wake of the aborted flotation.

The last-minute collapse also underscores the nervousness of Permira in the wake of a series of underperforming listings, including that of Dr Martens in 2021. The bootmaker has since issued five profit warnings and its shares have plunged 80 per cent.

Talks that led to the decision were fractious, according to multiple people directly involved in the listing preparations. The divergence of views between advisers and their private equity client sparked “long and heated discussions”, according to one insider.

“With all due respect what the fnck are you talking about,” one adviser lashed out during a call on Tuesday, according to other people on the line. 

“It looks bad to pull out two days before the debut, but it looks much worse if the stock plunges 20 per cent in the first week of trading,” a banker remarked on Wednesday.

“Permira can’t afford another embarrassment after Dr Martens,” said another.

Executives at the €80bn London-based buyout group started worrying last week, according to people close to the talks. Shares in LVMH and puffer jacket maker Moncler tanked following French President Emmanuel Macron’s surprise decision to call snap parliamentary elections, raising the prospect of a far-right government leading Eurozone’s second-largest economy.

As investors reduced their exposure to European stocks, “big names that had committed dozens of millions” to the Golden Goose IPO scrapped their orders, said one person close to the talks.

It did not help that important investors such as BlackRock and GIC had stayed away, according to people with knowledge of the bookbuilding. Permira feared a sell-off in the after-market, people close to the buyout group said.

Bookrunners, however, pushed back until the end: the investor mix was strong enough to go ahead, they argued. To be sure, the IPO would price near the bottom of the range at €9.75 per share, valuing the company at less than €2bn — much lower than the €3bn that had previously been speculated.

But the book was roughly four times subscribed at that price. And the company’s top management, led by Silvio Campara, believed the valuation was “fair”, as did Permira, according to three people.

The private equity group bought Golden Goose, which is headquartered near Venice, just before the pandemic led to global lockdowns, with Italy among the most severely affected countries.

While the global luxury sector has been facing a slowdown this year, Golden Goose reported a 12 per cent rise in revenue in the first quarter. 

“Dr Martens was by far a lower price point and is more an upper mass-market product, [while[ Golden Goose is more accessible luxury and is able to build up its story,” said Mario Ortelli, an adviser focused on luxury.

However, Permira’s record was a sensitive issue, market participants say. French cyber security company Exclusive Networks, which it listed in 2021 at €20 per share, is now trading at just €19. TeamViewer and Allegro, which the firm took public in 2019 and 2020, respectively, both trade below their IPO prices.

Permira sold the last of its stake in Hugo Boss in March 2015, shortly before a sharp drop in its share price, which is now more than 60 per cent below its level when the buyout group exited.

Permira had initially sought to bring large institutional Asian investors on board but failed, according to three people familiar with the talks. Singapore’s GIC, for example, had been approached to be an investor in the deal but decided against it. GIC declined to comment. Another opt-out was BlackRock, said the people. BlackRock could not immediately be reached for comment.

“The risk of this turning into a mediocre IPO was higher than the advantage of going ahead,” said one participant.

Permira may attempt to revive the listing in the next few weeks, some advisers said. But its decision not to go ahead may have taken the momentum out of the whole IPO market in Europe. Other listing candidates are also thinking twice about their plans, including Tendam, a private equity-owned Spanish retailer. Tendam declined to comment.

Campara, however, said he was hopeful the IPO preparations would not go to waste.

“Golden Goose is a great story of love and our priority has always been to tell this story to the right community of investors,” he told the Financial Times after the decision to postpone the company’s listing. The roadshow made investors “perceive Golden Goose not only as a strong and profitable business, but as a true Next Gen global luxury company.”

Leader of militant group issues threat as fears grow of full-blown war across Lebanon’s southern border

Hizbollah leader Hassan Nasrallah has warned that the Lebanese militant group would fight “without rules and without limits” if its conflict with Israel widens.

In a televised address, Nasrallah also threatened neighbouring Cyprus for the first time, saying Hizbollah would consider the country “part of the war” if it allowed Israel to continue using Cypriot airports and bases for military exercises.

The Iran-backed militant group and Israeli forces have been trading fire almost daily since the war between Israel and Hamas in Gaza began in October.

The speech comes as fears have risen of a full-blown war between Hizbollah and Israel, with belligerent rhetoric escalating and the Lebanese militant group this week issuing surveillance drone footage of sites in Israel.

Cross-border clashes intensified last week when Hizbollah fired dozens of rockets at Israel after it killed one of the group’s senior commanders in an air strike.

Nasrallah said Hizbollah had “information that Israel is conducting training in Cyprus and Cypriot airports” and that he had asked Lebanese officials to discuss the issue with Cypriot President Nikos Christodoulides when he visited last month. “If Israel uses [the Cypriot] air bases to strike Lebanon, [Cyprus] will get dragged into the war,” he added.

Israel has held joint military exercises, including in 2023, with Cyprus, which lies in the Mediterranean close to Lebanon. The pair signed an agreement that also included Greece that year to step up defence co-operation.

“The Cypriot government should beware that opening Cypriot airports and bases to the Israeli enemy to target Lebanon means that the Cypriot government has become part of the war,” Nasrallah said.

Nasrallah said that while “we do not want total war” with Israel, his group had more than enough capabilities to sustain a wider confrontation with its southern neighbour. 

“Let Israel wait for us by land, air, and sea in case of a greater war,” he said. Nasrallah reiterated that Hizbollah’s condition for a cessation of hostilities on the Lebanon-Israel border was peace in the besieged Palestinian enclave of Gaza.

“A ceasefire in Lebanon, Iraq and Yemen requires one thing: an end to the war in Gaza,” Nasrallah said, referring to the regional hostilities that erupted after Hamas’ deadly October 7 attack and Israel’s retaliatory offensive in Gaza. “We will continue to support Gaza and we are ready for anything.”

The comments come a day after Israel’s military said senior officers had approved “operational plans for an offensive in Lebanon”.

Despite the intensifying exchanges, which have displaced tens of thousands of people on both sides of the border and caused casualties in Lebanon and Israel, the two sides have not so far been drawn into all-out war. The US is leading a diplomatic push to de-escalate the situation, with White House adviser Amos Hochstein visiting both countries this week.

However, Israeli officials have repeatedly said they are prepared to take military action in the absence of a diplomatic resolution. The military on Tuesday said that as well as approving plans for an offensive, officers had taken decisions on “increasing the readiness of troops in the field”.

That announcement came after Hizbollah, one of the world’s most heavily armed non-state actors, on Tuesday released a nine-minute video of what it said was footage gathered by its surveillance drones of parts of Israel, including the port in the northern city of Haifa.

In addition to views of the port, which lies about 30km from Lebanon’s border, the undated footage included what Hizbollah said were images of other military infrastructure.

Hizbollah, which controls southern Lebanon, is the country’s most potent political and military force.

In his speech on Wednesday, Nasrallah said the drone footage was “proof that we have the capabilities” to target anywhere in Israel, adding that his group had gathered hours of surveillance footage and had “many more drones” flying.

The video drew a furious response from Israel on Tuesday. Foreign minister Israel Katz warned that his government was “very close to the moment of decision to change the rules against Hizbollah and Lebanon”.

“In an all-out war, Hizbollah will be destroyed and Lebanon will be severely hit,” he wrote on the social media platform X.

Truss has earned support from Selfridges and Depop, as well as a £1 million grant from the UK government’s innovation agency in its effort to build image-recognition for garments that it says could help to power the booming secondhand market.

If you want to sell a Helmut Lang jacket on a resale site, you have to photograph it, write out a description and price it, which isn’t always straightforward. There are different levels of value for a Helmut Lang jacket designed by Lang himself, one designed by an anonymous studio team after his departure and one designed recently by new creative director Peter Do, even though they all carry the same label.

For resale businesses, the manual work involved, including inputting product details and research to determine the best price, can contribute to high operating costs that strain profitability. For peer-to-peer marketplaces, the effort can be a deterrent to sellers seeking easy cash from items they no longer wear.

The tech start-up Truss says it has a solution, and it’s getting the chance to prove it through a £1 million ($1.27 million) grant from the UK government’s innovation agency as well as support from Depop, Selfridges and The University of Warwick. The idea is that, using artificial intelligence, Truss can identify any garment just from a picture, provide full product details and say what it typically sells for online and how long previous listings have sat based on data scraped from resale sites.

Secondhand companies have tried to automate some of this work for years. The RealReal has invested in automating tasks like copywriting and pricing. Ebay lets users type in the title of an item and suggests listing details, including a selling price.

Truss, however, wants to build a data infrastructure for the entire secondhand market that users tap into with only a photo.

“We are providing them an opportunity to test some of this stuff in the wild,” said Alice Jacques, Depop’s director of machine learning.

The idea of being able to quickly identify any fashion item simply through a photo has become increasingly feasible with advances in the AI fields of machine learning and computer vision. They’ve figured into innovations from self-driving cars to Google Lens, which now lets users snap a picture of any fashion item and locate it, or at least something visually similar, online.

Truss effectively works on the same idea, but instead of searching the internet for a match it searches its fast-growing database of fashion items, which already totals more than 50 million products, some dating back decades, according to Woody Lello, Truss’ co-founder and chief executive. It started out using off-the-shelf AI software for the job, but those algorithms have shortcomings, like struggling to identify something as the same garment if it’s on a hanger in one picture and laid out on the floor in another. With the money from the grant, Truss is building proprietary algorithms.

Its biggest challenge, though, is building up that product database. It needs images of every item it hopes to identify as well as product details. Selfridges and Depop are providing some information, but Truss also scrapes websites and has direct plug-ins with other partners. All product images need to be tagged properly, too. The company uses a mix of AI and a worker service in Ghana that Jackson said is there to do quality assurance. The workers make sure photos identified as the same product are indeed the same item, and that the tagging is correct.

For Depop, the hope is that Truss’ technology could help its users and further some goals Depop is pursuing behind the scenes. Jacques noted that Depop sellers are frequently on Reddit asking questions about an item’s rarity to know how to price it, and many feel intimidated by the blank page they face when they have to describe a product. It wants to smooth that process, potentially even getting to the point of one-click listings, though it’s working out how it might do that without sellers losing their individual tone of voice.

Depop is also constantly working to improve its ability to surface the right items in shoppers’ searches. Its algorithms rely on behavioural data from its users and data from the listings themselves, but while it has a handle on the behavioural data, it still has work to do on the listing data, Jacques said. The way sellers label and describe their products can vary greatly, as can two images of the same item. Given that the company has about 34 million products in its catalogue, it results in a huge amount of unstructured data. Truss’ more standardised data could be a valuable complement.

Selfridges would have its own potential uses for the technology. The retailer has embarked on an ambitious plan to have 45 percent of transactions come from products made with recycled materials or from services like resale, repair or refills. (In 2022, less than one percent of transactions came from those sources.) But as its resale business scales, so does the work that comes with it. Selfridges is counting on Truss to make the process more efficient.

With high-end items, there’s also valuable additional context that doesn’t apply to mass-market items, like the season they’re from or which celebrities wore them, Lello said. Filling in the correct information and pricing it accordingly takes time, which equates to costs.

“We can provide all of that rich information instantly, meaning that someone listing the products would no longer have to do that,” said Felix Jackson, Truss’ chief operating officer and another of its co-founders. (There are four total).

Truss will have the opportunity to prove that claim to its partners, and Lello said he also hopes the company can find a place in the ecosystem of companies building digital product passports for fashion items. The project is gathering urgency as the EU looks set to mandate these digital identities amid a bigger move toward ensuring greater traceability and transparency in industries like fashion. Those efforts all focus on new products. Truss wants to extend a similar notion to millions of items already circulating in the marketplace.

Chip maker passes Microsoft for top spot, just as John Chambers-led Cisco Systems did two decades ago. He says the situation now is different.

Nvidia NVDA 3.51%increase; green up pointing triangle became the U.S.’s most valuable listed company Tuesday thanks to the demand for its artificial-intelligence chips, leading a tech boom that brings back memories from around the start of this century.

Nvidia’s chips have been the workhorses of the AI boom, essential tools in the creation of sophisticated AI systems that have captured the public’s imagination with their ability to produce cogent text, images and audio with minimal prompting.

The last time a big provider of computing infrastructure was the most valuable U.S. company was in March 2000, when networking-equipment company Cisco took that spot at the height of the dot-com boom.

Cisco was riding the wave of a different revolution—the internet—where its products powered that budding industry. Like Nvidia, Cisco also surpassed Microsoft MSFT -0.45%decrease; red down pointing triangle to become the most valuable company.

John Chambers, who was chief executive of Cisco during the dot-com boom, said there are some parallels, but the dynamics of the AI revolution are different from previous ones such as the internet and cloud computing. Chambers, now a venture investor, has made big bets on AI in cybersecurity and other arenas.

“The implications in terms of the size of the market opportunity is that of the internet and cloud computing combined,” he said. “The speed of change is different, the size of the market is different, the stage when the most valuable company was reached is different.”

Nvidia, a 31-year-old company, became the world’s most valuable firm on Tuesday. The stock closed at $135.58, giving the chip maker a valuation of $3.335 trillion, just above Microsoft at $3.317 trillion.

It marks the first time a company other than Microsoft or Apple has held the title of largest company since February 2019, when Amazon.com briefly topped the list. Nvidia was ranked fifth largest by market valuation a year ago and was ranked 10th largest two years ago. Five years ago, it wasn’t in the top 20 largest companies.

The scramble among tech giants such as Microsoft, Meta and Amazon to lead the way in AI’s development and capture its hoped-for benefits has led to a chip-buying spree that lifted Nvidia’s revenue to unprecedented heights. In its latest quarter, the company brought in $26 billion, more than triple the same period a year before.

Nvidia’s stock was the best performer in the S&P 500 in 2023 and has more than tripled in value over the past 12 months. The company’s value hit $3 trillion this month, less than four months after it reached the $2 trillion mark.

Nvidia split its shares 10-for-1 this month, a move aimed at lowering the price of each share and making it more accessible to investors.

The stunning rise has won plaudits from analysts who agree with Chief Executive Jensen Huang’s assertion that AI is the foundation of a new industrial revolution to which the company is the key supplier. Huang says Nvidia is building “AI factories” that take in data and churn out intelligence.

Nvidia “will be the most important company to our civilization over the next decade as the world becomes more AI-driven,” CFRA Research analyst Angelo Zino said recently. The chips Nvidia pioneered will be the most important invention of this century, he said.

The insatiable flow of money into AI has raised eyebrows among investors uncertain the boom can continue without pause. Some $50 billion has been invested in Nvidia’s chips since the boom began, according to a Sequoia Capital estimate in March, but generative-AI startups have only brought in $3 billion in sales.

That imbalance, Sequoia partner Sonya Huang said at the time, meant “we’ve got some real problems to fix.”

Capital Economics chief economist Neil Shearing on Monday said “enthusiasm around AI has all the hallmarks of an inflating bubble” and would likely help keep U.S. stocks rising for the next year and a half. But it would eventually burst, he said, with the U.S. market “destined for a period of significant underperformance” to follow.

Nvidia and its chief, Huang, are showing few signs of concern, despite an array of challenges around them, from feisty competitors to regulators increasingly scrutinizing the company’s dominance in the AI-chip market, where analysts suggest it has a share of above 80%.

Huang early this month was in Taiwan, where he gave an address and announced new details about a future generation of AI chips set to arrive in 2026.

Lenders robbed at gunpoint lose $120mn as Palestinians queue for days to rescue their own cash

Armed gangs, including Hamas-backed groups, have plundered at least $120mn from banks in northern Gaza in just the past two months, according to UN estimates, as the war-ravaged strip suffers from a severe cash crunch.

The thefts amounted to at least a third of the cash stored in stranded vaults, according to mid-May estimates seen by the Financial Times. About $240mn more is sealed in bank vaults in northern Gaza, some entombed in concrete to try to prevent looting following the collapse of civil order in the besieged enclave.

The robberies have fuelled concerns among Israeli officials that some of the funds could further fuel Hamas’s insurgency as the militant group gains control of scarce banknotes in the besieged enclave’s closed wartime economy.

The conflict and Israeli restrictions on the movement of cash and armoured cars have limited the availability of physical money. Residents must pay a fee a week in advance to even join the queue for a cash machine in central Gaza, one of a tiny handful of functioning machines left for the strip’s more than 2mn people.

The most dramatic bank robberies took place on April 17 and 18, shortly after the Bank of Palestine — the biggest financial institution in the occupied Palestinian territories — opted to pour concrete around the vault of its branch in the once-upmarket district of Rimal.

The emergency measure made no difference. An explosion rang out at the branch on April 17; one witness told the FT of banknotes fluttering through the air. Thieves absconded with an estimated $31mn in various currencies, according to an internal document sent to the bank’s shareholders and seen by the FT.

The next day, the bank told customers and merchants to come to the remaining branch so they could withdraw their deposits before more cash was stolen. Instead, when they opened the doors, they found “armed groups already inside the branch”, according to the document.

Shots were fired and an employee was taken to hospital with a suspected heart attack before others were forced to open the vaults at gunpoint. The bank estimated that $36mn was taken in this second heist, “confiscated on orders . . . from the highest authority in Gaza”, a veiled reference to Hamas, which ruled the territory before the war. The Rimal bank robberies were first reported by Le Monde.

While the robberies threatened the Bank of Palestine’s employees, the more than $70mn stolen does not threaten its stability given its overall $5.41bn in customer deposits, most of which — along with the lion’s share of its business — is in the West Bank. At the start of the war its liquidity coverage ratio, a common metric for short-term financial health, was more than 740 per cent, compared with less than 200 per cent for US and UK banks.

“From the start of the war, [the bank] has taken all necessary precautions and provisions to ensure that its soundness and stability as an institution, and with respect to its deposits and portfolio, will remain intact even under the worst-case scenario and in the face of the most challenging developments in Gaza,” the Bank of Palestine said in a statement, adding that the estimates of the amounts stolen “cannot be confirmed due to the difficulty of assessing the damages on the ground”.

Banking officials are careful not to directly blame Hamas, but this amount of money in the hands of the “highest authority” is likely to fuel an already evolving insurgency against the Israeli military, said two Israeli officials.

The two large-scale robberies capped a theft spree that had begun earlier on a more modest scale: by April, about $7mn had already been stolen from Bank of Palestine branches, mostly from the ATM cassettes, by armed gangs that “drilled into” the buildings, according to the internal document.

The thefts came as Gazans, most of whom live in poverty, struggle to find banknotes to buy essential supplies as inflation spirals following eight months of war.

The enclave uses Israeli shekels, but Israel’s military has blocked the entry of fresh notes, forcing ordinary Palestinians to use faded Jordanian dinars and dwindling supplies of US dollars as shekel notes rip apart from wear and tear.

The Israeli military itself has seized at least Shk100mn ($27mn) of cash, and “transferred it to the Bank of Israel in co-operation with the Ministry of Defense in order to prevent Hamas from access to it”, the Israel Defense Forces said in a statement.

Further worsening cash shortages, wealthy Palestinians have sent tens of millions to an Egyptian tour operator, which demands $5,000 a person in crisp new $100 bills — which are less at risk of disintegrating than older cash — to enable them to flee Gaza.

Within a month of Hamas’s devastating attack on Israel on October 7, which triggered the war, it was clear to Bank of Palestine that the cash in its branches would be a problem. As northern Gaza was devastated by Israel’s invasion, the bank convinced the UN to carry out a dangerous convoy to transport banknotes worth $50mn to the south.

A second convoy was abandoned when the UN arrived to find Israeli air strikes had destroyed a branch. Appeals to the Israelis, the US, Qatar and the UN for help moving the cash failed. “The evacuation of cash from Gaza is virtually impossible,” the bank wrote to shareholders earlier this year.

That left more than $100mn in cash at its two most prestigious branches, in Rimal and in downtown Gaza City, setting the scene for the subsequent thefts.

Before the war, Gaza had more than 90 cash machines and 56 branches of banks, including the Bank of Palestine, Cairo-Amman bank and Quds Bank. All dealt mostly in Israeli shekels after the 1990s Oslo agreements reinforced their position as the de facto currency of the occupied Palestinian territories.

Cash was moved in armoured cars, with Israel’s facilitation, between Gaza and the occupied West Bank, where the banks and Palestine Monetary Authority are based. The Bank of Israel would trade soiled banknotes for new, or allow fresh injections of currency, sometimes in Brinks trucks, during periods of calm.

Bank transfers, even from abroad, are still sometimes possible to internationally recognised banks with a presence in Gaza, like the Bank of Palestine, but using that money has proven increasingly difficult and expensive.

The Palestine Monetary Authority on May 8 launched a commission-free, instant electronic payments system to “compensate for the cash liquidity shortage”. But transferring money digitally requires electricity and an internet connection, both in short supply.

Newer currency notes, meanwhile, command a small premium over older ones at some shops, as wear and tear degrades the limited cash in Gaza.

In northern Gaza, where hunger is acute and aid convoys rare, traders charge a 20 per cent commission on bank-to-cash transfers, said Ibrahim al-Kharabishy, a lawyer in Jabalia.

His old clients, some outside Gaza, send bank transfers either for his work or to support him, his three children and his pregnant wife. To buy the “exorbitantly expensive” canned peas, chickpeas and a small amount of tinned meat, he transfers money to shopkeepers using a banking app.

But given the prices and commissions, he still struggles to afford the food. “I consider myself well-off but I can’t afford them,” he said.

Abou Fares, who fled to southern Gaza with his family, has struggled to get any cash in recent weeks. A dealer recently took a 10 per cent cut of 5,000 shekels he transferred digitally, paying him out 4,500 shekels, or about $1,200, in old, soiled banknotes.

Reaching a cash machine entails the risk of travelling through an Israeli checkpoint and involves paying a fee of 2 per cent of the withdrawal and then waiting a week before he is even allowed to join the queue.

For a short while he had located a mini-mart in Rafah that accepted his Visa debit card but charged inflated prices to use it to buy food for his family — but then the Israelis invaded Rafah, and he heard the shop had been destroyed.

Central bank warns of fiscal challenges including ageing populations, extra defence spending and climate change

Eurozone countries are facing “significant fiscal burdens” from ageing populations, extra defence spending and climate change, making it more urgent that they cut their high debt levels, the European Central Bank has warned.

Officials at the central bank estimate Eurozone countries have to reduce their budget deficits by an average of 5 percentage points of GDP, which would require savings or extra revenue of €720bn at current output levels.

The ECB’s assessment of the budgetary challenges confronting the 20 members of the single currency bloc came as the European Commission reprimanded France and six other countries for breaching EU fiscal rules, increasing investor anxiety about the sustainability of public finances.

The debt levels of Eurozone countries are coming under the spotlight after they shot up due to higher government spending aimed at shielding households and businesses from the coronavirus pandemic and the energy crisis triggered by Russia’s invasion of Ukraine.

Investor anxiety has been heightened by the calling of a snap election in France, where the far-right Rassemblement National and a new left-wing alliance are leading in opinion polls. The parties have made lavish spending pledges, threatening a stand-off with both debt investors and Brussels.

The ECB said the pressure on public finances in the bloc would only increase in the coming years. It estimated that, to cope with the rising demands of ageing populations, climate change and higher defence spending by 2070, countries would require an average extra fiscal effort worth 3 per cent of GDP starting from this year.

This would come on top of the need to reduce debt levels back down to the EU limit of 60 per cent of GDP by 2070, which by itself the ECB said would require countries to “immediately and permanently” save an extra 2 per cent of GDP on average.

“These developments will be challenging enough in isolation, and countries will face all of them simultaneously,” the ECB said. “Consequently, action needs to be taken today — especially in high-debt countries facing elevated interest rates and the associated risks.”

There was a wide divergence between the scale of fiscal effort the ECB estimated countries would need to make to hit the 2070 target. Slovakia was estimated to need savings worth 10 per cent of GDP and Spain 8 per cent, while Estonia, Croatia, Greece and Cyprus would need to save less than 2 per cent of GDP.

“The necessary fiscal adjustment is large by historical standards, but not without precedent,” it said, pointing out that some countries, including Belgium, Ireland and Finland, ran primary budget surpluses, excluding interest payments, of more than 5 per cent of GDP for more than a decade in the 1990s and early 2000s.

The ECB warned the costs of tackling climate change could be much larger if global warming is not limited to 1.5C above pre-industrial levels. But it said there could be positive spillover effects from higher spending, structural reforms, digitisation and globalisation that were not captured by its models. 

“There is no room for complacency, as the longer the adjustment is postponed, the larger the eventual adjustment cost will be,” it warned.

Postponement of fashion group’s IPO shows that, even in the luxury world, gimmicks can have a limited shelf life

Selling luxury requires creating the illusion of desirability. Flagship stores keep customers queueing outside their doors even when the interior is sparsely populated. Velvet ropes hint at crowds while wares are gathering dust in the shop. Unless real demand comes through, however, such gimmicks have a limited shelf life. 

That is one lesson from the shock postponement of Golden Goose’s highly touted IPO. Other listing candidates should take note.

The Italian maker of distressed-looking trainers used every tool in the box to create a buzz around its listing. Its investor calls featured discussions on the scarcity of happiness and the importance of “youniqueness”. Its initial pricing expectations — in keeping with its €500 trainers — seemed breathtakingly high: early suggestions were that Golden Goose was eyeing a €3bn valuation, a substantial premium to luxury peers. Bankers, as always, talked up investor interest in the stock. 

The dawning of reality and a target valuation set at about €2.2bn did not manage to create a sense of scarcity. Golden Goose tested the market by pricing its float a little above the bottom of its range. And, like luxury customers, investors typically don’t like to feel that they have put in a bid for unloved wares.   

The result was the embarrassment of an IPO pulled amid fears that it would perform poorly. Owner Permira, which had already scorched investors with the 2021 listing of Dr Martens in London, couldn’t let another shoe drop.

Partly this was unlucky timing. The luxury sector has been shaken by concerns over slowing demand. Moncler — relative to which Golden Goose is often valued — is down 7 per cent since the group announced its intention to float. Spanish retailer Tendam has also reportedly postponed a flotation.

Luxury may be a tough sell at the moment. But Golden Goose’s variant — which it inexplicably dubbed “lovexury” — is tougher still. Its trainers and celebrity following may appeal to aspirational shoppers, who tend to be the first to pull the purse strings when spending declines. The group’s reliance on footwear stretches the limits of what might be considered a well-rounded luxury brand. 

Despite its fumble, Golden Goose is unlikely to have grounded an incipient recovery in IPOs, at least for quality specimens. But the market is in an unforgiving mood — suitably sceptical of sellers who have fed them duds in the past and unwilling to let overhyped equity stories fly.