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Russian jeweller Sokolov plans U.S. IPO as revenues double

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Russian jeweller Sokolov plans U.S. IPO as revenues double
© Reuters. Artem Sokolov, managing partner and co-owner of Sokolov Jewelry poses in Moscow, Russia November 18, 2021. Picture taken November 18, 2021. REUTERS/Evgenia Novozhenina

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By Olga Popova

MOSCOW (Reuters) – Russian jeweller Sokolov is planning a dual listing in New York and Moscow in 2023, its co-owner told Reuters, betting on strong revenue growth and the development of its retail network as it joins a raft of Russian companies pursuing market debuts.

Russian initial public offering (IPO) activity has picked up as the economy improves after the COVID-19 pandemic last year and as concerns over more Western sanctions fade, although a couple of postponements have marred the listing spree.

“In the spring of 2022 we want to do a pre-roadshow for a year… and we plan to enter the market in the United States and Moscow in 2023,” Artem Sokolov, managing partner and co-owner of the almost 30-year-old jewellery network, told Reuters.

“In the United States we are considering both the New York Stock Exchange and Nasdaq,” he said. “To have good free float and liquidity, we need to raise about $500 million.”

Sokolov, which manufactures jewellery and operated as a wholesaler for many years, tripled its market share with the launch of its brand in 2014 and soon after moved into retail, which now accounts for almost half of revenue. It expects to have 350 stores by the end of 2021, up from 20 in 2019.

Sokolov’s January-September revenue was around 20 billion roubles ($275 million), with full-year revenue expected to reach around 30 billion roubles, more than doubling year on year.

The company did not disclose profit data, but Sokolov said: “We have always been profitable. Now we have exponential development of revenue and profit.”

Sokolov forecast that the company should become Russia’s jewellery market leader by retail revenue, overtaking domestic rivals Sunlight and 585 Gold in 2023. He views Swarovski and Pandora (OTC:) as the company’s closest international competitors.

The group also sells jewellery on a mobile app, which has one million monthly active users. It has three million monthly active users on its website.

“We will fight to be the number-one mobile jewellery application in the world with our own retail and production,” he said.

Sokolov is also planning to open 15-20 stores in Kazakhstan in 2022 and will launch a retail network in Germany next year.

($1 = 72.8453 roubles)

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Stock Markets

Stats had a positive effect on the European stock market. European growth stocks

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West European stock indexes closed Wednesday’s trading with a confident growth. Traders evaluated the fresh batch of statistics and bought European growth stocks.

What influenced European stocks to high growth?

GDP volume in France rose 0.2% in the third quarter compared to the previous three months, final data from the national statistics institute Insee showed. The final data coincided with a preliminary estimate. Analysts, on average, had not expected a revision, according to a Trading Economics survey. GDP growth slowed from a 0.5% rebound in the second quarter.

Consumer prices in France, harmonized with European Union standards, rose 7.1% year-over-year in November. Insee also reported. The November rate of increase in consumer prices coincided with that of October, and analysts polled by Trading Economics expected inflation to remain at the same level.

Consumer spending in the country collapsed by 2.8% in October compared with the previous month. Analysts polled by Bloomberg expected a more moderate decline of 1 percent. The consensus forecast of experts polled by Trading Economics envisioned a 0.6% decline. The decrease in consumer spending was the maximum since April 2021.

The number of unemployed in Germany increased by 17 thousand in November, according to the Federal Employment Agency of Germany. The rise in the index was marked at the end of the sixth month in a row. Experts interviewed by Bloomberg agency, on average, predicted an increase of 13.5 thousand. Respondents to Trading Economics expected an increase of 13 thousand.

Additional positives for investors in European markets on Wednesday were messages about easing of coronavirus restrictions in a lot of cities in China. Note that Amazon’s stock price is also rising if you are interested in the U.S. stock market.

Earlier, we reported that U.S. stock indices were up 2.2-4.4%.

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U.S. stock indices today rose 2.2-4.4%

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U.S. stock indices today

The U.S. stock indices today closed the trading on Wednesday with the confident growth due to the statements of the Federal Reserve Chairman, Jerome Powell, who confirmed that the U.S. Central Bank could slow down the basic rate rise as early as in December.

Judging by the quotations of futures on the level of the prime rate, U.S. stock market indices expect the Federal Reserve to raise it by 50 basis points (bps) in December – to 4.25-4.5%. The U.S. Central Bank has increased the rate by 75 bps at each of the previous four meetings. Against this background, the current stock price of Facebook also rose.

The report by the industry organization ADP, published on Wednesday, showed a slowdown in job growth in the U.S. private sector. Their number increased by 127,000 in November, the lowest rate since January, said the ADP. Analysts polled by The Wall Street Journal on average had forecast job growth of 190,000 after a jump of 239,000 in October.

Data from the U.S. Commerce Department, also released Nov. 30, showed higher-than-reported growth in the U.S. economy in the third quarter. U.S. GDP grew at an annualized rate of 2.9% in the July-September quarter, rather than the previously reported 2.6%. Experts polled by Trading Economics had expected an average revision of 2.7%.

Also, the Federal Reserve released its regional Beige Book survey Wednesday, showing that economic activity in the United States was little changed in the fall.

Federal Reserve banks in five counties reported a weak increase in activity in October and November, while the other seven reported a stable or slightly declining economy.

  • The Dow Jones Industrial Average index was up 737.24 points (2.18%) at 34589.77 as of Wednesday’s market close.

  • Standard & Poor’s 500 rose 122.48 points (3.09%) to 4,080.11 points.

  • The Nasdaq Composite added 484.22 points (4.41%) to 1,468.

All three U.S. stock market indices closed November, with the Dow Jones gaining 5.3%; the S&P 500 gaining 4.6%, and the Nasdaq Composite gaining 3.3%.

Earlier we reported that Main European stock indices were rising during trading.

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Stock Markets

Main European stock indices rise in trading

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best european stock indices

Main European stock indices are rising during trading on Thursday. The Stoxx Europe 600 composite index of the largest companies in the region rose 0.58% to 442.60 points. German DAX is up 0.34%, British FTSE 100 is up 0.15%, French CAC 40 is up 0.01%, Italian FTSE MIB is up 0.47% and Spanish IBEX 35 is up 0.45%.

What affected the best European stock indices?

During a speech at the Brookings Institution on Wednesday, Powell reiterated that the Fed could slow the rise in the prime rate as early as December. “The time to moderate the pace of rate hikes may come as early as the next meeting,” Powell said. 

The Fed chair, meanwhile, tried to balance those words with “hawkish” signals. Market Watch notes. He said that the U.S. Central Bank will have to raise the rate higher than could be expected a few months ago. Moreover, Powell made it clear that the issue of rate cuts is irrelevant at the moment. By the way, his words influenced the growth of the current stock price of the NASDAQ-100

Another Fed official, Board of Governors member Lisa Cook said she believes the regulator needs to keep raising rates as inflation is still too high. “We’ve started to get more favorable inflation data. But I would be cautious about drawing big conclusions on just one month’s worth of data,” Cook said during a speech at the Detroit Economic Club.

Earlier, we reported on how European stock indexes were falling following Asian stock markets.

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