LUXURY leather goods retailer Coach, the first US company to be listed in Hong Kong, registered a weak trading debut yesterday after issuing depositary receipts in a strategy aimed at raising its profile among China's wealthy.

Coach issued 293 million securities in a secondary listing in Hong Kong. The shares opened at HK$47.65 (US$6.12) and ended 1.8 percent higher at HK$48.50.

Each of Coach's Hong Kong depositary receipt represents a tenth of its New York-listed shares, which closed at the equivalent of HK$487.45 during the previous trading session, meaning the deficit on the Hong Kong market is about 0.5 percent.

By comparison, the Hang Seng Index surged 5.6 percent, and Coach's peer Prada gained 6.9 percent.

The secondary listing, which does not involve fundraising, is intended to boost Coach's brand recognition in the Chinese market, Chairman and Chief Executive Lew Frankfort said yesterday.

Frankfort said Coach plans to add another 30 stores to its current 70 in China next year, and the country is expected to replace Japan as Coach's second-largest market after the US.

The World Luxury Association said China will next year overtake Japan to become the world's biggest luxury goods consumer market next year, and consulting firm McKinsey & Co predicted China will contribute 20 percent of industrial sales globally by 2015.

Coach is not the first luxury goods retailer to use a listing to leverage a brand in China. Italian fashion house Prada raised HK$19.4 billion in a Hong Kong initial public offering in June, with an expectation its Chinese sales will double or triple in the next two or three years.

Source:shanghaidaily