- Investors in the Prague Stock Exchange will be able to buy shares in the shoe company Prabos in May.
- Focusing mainly on work footwear for uniformed services, such as the army, police, or fire brigade, the company will offer 15 per cent of its shares on PX Start, a new market of the Prague Stock Exchange. This is not a new issue, but rather a part of the shares held by one of the two co-owners.
- Of the up to CZK 90 million that Jaroslav Palát plans to raise, two-thirds are to go back to the company. The company will use the money for further expansion.
While no new company has entered the main market of the Prague Stock Exchange since the arrival of Moneta Bank, small and medium-sized companies are interested in the new PX Start market. After Hub Ventures, an operator of coworking centres, and Primoco, a manufacturer of unmanned aerial vehicles, the shoe company Prabos will try to raise capital, too.
Jaroslav Palát, one of the two co-owners of the company, based in Slavičín in the Zlín region, wants to raise at least CZK 60 to 90 million in mid-May in exchange for 15 per cent of the company’s stock. “Originally, we considered increasing the capital by 15 per cent, but the second co-owner is very conservative and wants to keep his half-share in the company,” Palát explains. Palát plans to keep a third of the money obtained and reinvest the remaining two-thirds into the company as subordinated debt.
Prabos, which produces a quarter of a million pairs of work, military, and outdoor footwear annually, plans to use the capital for its further development. Some of it will be used to refinance bank loans, and another part will be spent on a new sewing workshop in Ukraine, which will open near the city of Dnipro in a month. So far, however, it has not been integrated into the company, because for the banks that help Prabos with financing, Ukraine is too risky a territory, so they require the shareholders to use their private assets as a guarantee.
After 15 years of doing business in Ukraine in the fields of construction and the production of shoe insoles, however, Mr. Palát relies on his hands-on experience and is financing the construction of the new workshop by himself. “The expansion to Ukraine will not be expensive. Since I already have experience and production facilities there, it will only be hundreds of thousands. It was enough to reconstruct the production hall and bring the machines,” says the co-owner of Prabos.
At the same time, moving to Ukraine is not just a way to get cheap labour. Prabos also plans to penetrate the local market with its products. This intention will cost between five and eight million crowns.
Shoe story from the Zlín region
◼ The history of Prabos from Slavičín dates back to 1860. After nationalization in 1948 (then still under the name Japis), the company came under the management of the Baťa company, and in 1952 it was incorporated into Svit Gottwaldov.
◼ As a subsidiary of Svit, it was bought at the turn of the millennium by the current owners, Jaroslav Palát and Juraj Vozár. Seven years later, the company was sold to the Polish LZPS group, which planned to merge Central European footwear manufacturers into one company and list it on the Warsaw Stock Exchange. However, this plan failed, and the Polish owners offered the indebted company, which had also lost some of its business, to its previous owners.
◼ Mr. Palát and Mr. Vozár gradually restructured the company and also went through litigation with the Blažek company for an attempt to copy Prabos’ soles in a contract for the police.
◼ In the coming years, they promise investors on the PX Start market that they will at least maintain last year’s sales of over CZK 300 million and a profit of CZK 35 million. They want to disburse 60 per cent of the profits to shareholders as dividends.
The company, whose sales are generated in the Czech Republic (60 per cent) and the rest of the EU (40 per cent), is bidding, for example, for a contract for the supply of shoes for the Ukrainian Air Force. Prabos has experience with footwear for security forces. In the past, it has won tenders for the Czech, German, and Latvian armies and the Czech Police. Its shoes are also worn by Czech firefighters and employees of Lesy ČR. Now the company is bidding for a contract for regular shoes for Israeli soldiers.
Orders for uniformed services now account for half of Prabos’ sales, and more than 40 per cent of its production is sold in work footwear stores. Direct sales through the company’s e-shop thus account for only a small part of the business.
However, the company wants to change this in the future so that each form of sales accounts for a third of sales. It will also use part of the capital from the stock exchange for that. “We need to raise awareness in the category of people aged from 20 to 35 years old. This is the target group for new growth. On the other hand, we are quite well established among people over 40 years old who remember our shoes from their military service,” says Palát.
Prabos wants to appeal to young people with its own application, which cost a million crowns. With its help, the customer takes pictures of their foot from three sides and the company can then recommend the right size of shoes and a suitable model. “It can attract young people and at the same time reduce the general distrust of buying shoes on the Internet,” thinks Palát.