Furthermore, with the Galeria Centrum, Smyk and Empik retail chains, as well as exclusive franchise contracts for several prestigious global brands such as Zara, Esprit, Chanel and Christian Dior, among its assets, Hetman also plans to change its name to NFI Empik Media and Fashion next month in order to signal to the public exactly what it does.
Hetman hopes to raise around zł.66.4 million (15 million) to speed up organic growth and another zł.44.2 million (10 million) to finance acquisitions. But the zł.110.6million (25 million) total will not necessarily be the value of the share issue, as bank debt may play a part in adjusting the figure.
Since the company's current debt of around zł.125 million is comparatively low, Maciej Dyjas, Hetman's president, believes borrowing should be easy. And while Eastbridge, the Dutch private equity fund that controls almost 90 percent of Hetman, is set to dilute its share in the concern, it is not planning an exit for at least three years.
With the group currently enjoying 10 percent growth, well above the national lifestyle market average of six to eight percent and double the sector's global growth rate, Dyjas says the time is ripe for expansion and the capital boost from the floor should quicken its pace.
"We're already the biggest book chain in Central Europe, and as regards firms positioned in the 'lifestyle' sector, we have really no direct competition," Dyjas proclaims.
Though the group targets just the upper 35 percent of the population, Dyjas claims the company nevertheless taps 75 percent of spending power, saying, "We sell what is necessary - not to live - but to live nicely."
While it attributes the losses of zł.24 million and zł.42.1million it incurred in 2002 and 2001, respectively, to the costs of restructuring its Galeria Centrum arm, the fact remains that Hetman only made a profit for the first time last year, albeit of zł.20.2 million on sales of zł.1 billion. Nevertheless, market watchers don't seem too concerned.
Certainly Grażyna Chudzińska, consultant at management consultancy Sisim Polska, doesn't think that low purchasing power in Poland represents a restraint on Hetman's country-wide expansion, arguing that there are still five major cities in the country with substantial wealthy populations the company can tap into.
"After the success of LPP on the floor," adds Mariusz Błachut, analyst at Credit Suisse Asset Management, referring to the local owner of popular fashion brand Reserved, which proved to be something of a golden goose for its backers, "investors like strong brands, which would include Smyk and Empik." Although he went on to add that investor interest, as always, will depend on the price of the shares in question.
Hilary Davies
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