(Bloomberg) -- Golden Goose Group SpA postponed its Milan listing at the last minute on concerns that the stock would fall on its debut, even after it tempered its valuation expectations.

While there was enough demand for the shares being offered, the Permira-backed sneaker firm was set to price at €9.75 a share, toward the lower end of its its €9.50 to €10.50 range. That, paired with volatility across European equity markets, fueled concern the stock would fall after the debut, according to people familiar with the transaction.

The decision to list came at a time when luxury stocks had already seen months of declines, weighed down by doubts over earnings and Chinese demand. The return of political risk after EU elections two weeks ago exacerbated fragile sentiment. Golden Goose cited current trading conditions in its decision to postpone.

Permira may also have been cautious about the aftermarket performance of the shares following the flop of its listing of British bootmaker Dr. Martens Plc in 2021. The shares have slumped 78% in London since listing, amid multiple profit warnings.

“It didn’t feel like amazing timing,” said Mark Nelson, senior equity analyst at Killik & Co., of the Golden Goose IPO. “They are not an Hermes, they are not a Brunello Cucinelli — they are a different business in that they focus on trainers,” he added. “I think it’s clearly had some weaker points to the best in class luxury brands.”

The shelved IPO shows the ongoing challenge private equity firms face to exit companies. Investors are increasingly putting pressure on buyout firms to return cash, but exits — via either sales or listings — remain challenging, with the market still struggling to digest a gap between buyers and sellers.

Still, the difficulties in the luxury sector and its underperformance has been widely known — some labels are offering unprecedented discounts on their products in China. An index tracking stocks such as LVMH and Moncler SpA has seen its valuation decline nearly 13% in the last three months, with multiples falling to 26 times forward earnings, well below the 34 times in 2021.

Milan-based Golden Goose had been planning to sell about 10.5 million shares, while majority-owner Permira was to offer 43.6 million existing shares, with the stock set to start trading on June 21. 

At the top end of the price range, the listing would have raised as much as €595.7 million ($640 million) and valued the company at about €1.7 billion, if the underwriters had exercised their overallotment option, according to Bloomberg calculations. Invesco was set to take €100 million of the shares as a cornerstone investor, according to the statement.

Golden Goose’s listing would have been Milan’s biggest since at least the €599 million sale by gambling company Lottomatica SpA in May last year.

Among other pending European listings, Greyhound bus owner Flix also recently postponed its plans for a June IPO in Frankfurt, Bloomberg News reported.

Still, some firms are going ahead. On Tuesday, bakery firm Europastry SA announced plans for an initial public offering on Spanish stock exchanges. And CVC Capital Partners Plc is planning to list Polish retailer Zabka Polska SA in September in an offering valuing the company at $7.5 billion to $8 billion, Bloomberg News reported.

Golden Goose’s IPO was being led by Bank of America Corp., JPMorgan Chase & Co., Mediobanca SpA and UBS Group AG.

--With assistance from Michael Msika and Kit Rees.

(Updates with further context, comments throughout.)

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