Burberry flies in the face of fashion to float at 230p

The luxury fashion label Burberry, famous for its beige raincoats lined with the company's trademark check, is to brave the turbulent stock market and will float this morning despite the hazardous conditions that have scared off its rival Prada and many others.

The company priced its initial public offering at 230p a share – the bottom end of the 230p to 290p price range it had set – which will value the company at £1.15bn.

Burberry said it was pleased to be pressing ahead and that pricing its shares at the bottom of the range only reduced the amount of new money raised by £67m. It added that the majority of investors it had attracted were international institutions looking to invest in the luxury goods sector for the long term, rather than UK retail investors.

Falling equity markets have left investors battered and bruised, but the 146-year-old fashion label, a subsidiary of the retailer GUS that paid £1m for the business in 1955, said it was determined to take its first steps on to the stock market.

Rose Marie Bravo, Burberry's Italian-American chief executive, said last night: "We are pleased with the response to the partial flotation of Burberry in such challenging stock market conditions."

The listing of 22.5 per cent of the group will raise £258m of new money. GUS, which will hang on to the rest of Burberry's equity, has pledged not to sell any more shares for 180 days after the listing.

Sources said Burberry got the go ahead to float after talks with its advisers Merrill Lynch and Morgan Stanley, as institutions proved to be willing to take a chance and invest in the company.

Burberry has proved brave enough to step where others have feared to tread. The market was deprived of a head-to-head battle between the UK retailer and Milan's fashion house Prada, which threw in the towel on its third attempt at a listing late last month.

The list of planned flotations being scrapped or delayed lengthened again after insurance broker HLF said it would decide within three days whether to go ahead with its flotation. In the latest sign of shattered market confidence the company, which was due to price its share sale yesterday, delayed at the last minute after negotiations with investors that lasted into the night. A spokesman said the company had just extended the decision on pricing and the current plan was still to float.

Companies that have pulled plans to join the market include Irish drinks and snacks firm Cantrell & Cochrane, home improvements chain Focus Wickes and telephone directory firm Yell. Burberry has a better chance of appealing to overseas investors as it has a big following in the US and Japan.

Over the past five years Ms Bravo has transformed Burberry from an ailing relic to one adored by customers as varied as the Queen, supermodel Kate Moss and pop stars Madonna and Posh Spice. Its products now encompass not only coats and bags, but also fragrance, shoes, bikinis and clothes for pets.