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to domestic institutional investors, with 7.2% picked up by domestic individual investors.
The public offering probably reflected the mood of foreign investors towards Turkey: risk perception in the short term, but strong potential in the longer run.
Despite all its troubles and the challenges it faces, Turkey still has a lot to offer and for foreign investors its market with a population of 80mn is too big to ignore. Central bank data show that there has been an inflow of $1.74bn
“The Mavi IPO represented a test of investors’ confidence in the country’s $857bn economy”
into government debt securities, while inflows into Turkish equities have amounted to $919mn between April 21
and June 2.
Probably, due to short-term risk perceptions, the Mavi IPO price turned out to be rather disappointing; demand from international investors, on the other hand, underscored investors’ trust in the company and Turkey’s economy. This was pretty much what happened when Global Ports floated shares on the LSE last May. In the highly anticipated public offering, the floating price was too at the bottom range.
Mavi, founded in 1991, is a very successful company with a strong business model that combines good PR campaigns with
a global store network of more than 5,600 points of sale. It sells around 7.5mn denim items globally each year.
Its 2016 sales revenues in Turkey, where Mavi has 261 retail stores, 70 franchised stores and 436 wholesale doors, was TRY1.12bn. The company’s market share in Turkey is 24%.
It is also truly a global brand: its products are sold in 35 countries. In the US, Mavi generated TRY77mn in revenues last year through one retail store and 1,303 wholesale stores, while in Canada, where it operates four retail stores, its sales amounted to TRY40mn.
Mavi products are available at well-known department stores such as Bloomingdale’s, Nordstrom, Peek & Cloppenburg, as well as through major online retailers Amazon, Zappos and Zalando.
Mavi says it enjoys “global brand awareness with celebrities and fashion icons as loyal followers” on social media.
It claims “a loyal customer base whose core segment is comprised of young, fashion-conscious women and men under 35, with benefits derived from attractive Turkish demographics, increasing spending power of millennial customers globally, and Mavi’s strong social media reach – 3.3mn followers in 2016.”
The fashion brand launched a loyalty programme in 2007 which now has 5.7mn loyalty card members, of which approximately 3.9mn are active users.
Goldman Sachs International acted as global co-ordinator for the offering, and, together with BofA Merrill Lynch, as joint international bookrunner. Is Yatirim was the domestic coordinator and domestic bookrunner.
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