London jeweler Graff Diamonds is putting its $1.5 billion Hong Kong initial public offering on hold because of the steep sell-off in global stock markets.
In a brief statement Thursday, Graff blamed adverse market conditions for the decision to postpone the IPO in the southern Chinese financial center.
"Consistently declining stock markets proved to be a significant barrier to executing the transaction at this time," the company said.
The jeweler, which gets half of its revenue from less than two dozen customers, would have been the latest in a line of foreign luxury brands to sell shares in Hong Kong. Italian fashion label Prada and luggage maker Samsonite held Hong Kong IPOs last year.
Foreign companies are seeking to cash in on rising investor interest in China, the world's second biggest economy, and to raise their brand profiles with the country's rapidly expanding pool of newly wealthy consumers.
In a prospectus filed earlier with the Hong Kong stock exchange, Graff outlined plans for a strategic expansion in Asia, focusing on China. Plans included opening shops this year in Hong Kong, Macau, Shanghai and Hangzhou as well as Tokyo. The company also intends to open five more stores in 2013, most of them in Asia.
The company said that demand for diamond engagement rings is rising sharply in China, where ownership levels are still far from rates in the U.S. and Japan.
Graff's decision to yank its IPO appears to have been made overnight as markets in the U.S. and Europe tumbled on intensifying fears over the European sovereign debt crisis and China's slowing economy. Hong Kong's benchmark Hang Seng Index ended 1.9 percent lower Wednesday and is down nearly 15 percent in the past three months.
Hong Kong newspapers still carried ads on Thursday from the company detailing plans to sell up to 311.2 million shares for as much as 37 Hong Kong dollars ($4.76) a share. That means the deal would have raised up to $1.5 billion.
Founder Laurence Graff, who opened his first two stores in London in 1962, has earned a reputation for dealing in large stones. In 2010, Graff paid $46 million at a Swiss auction for a 24.78-carat "fancy intense pink" diamond, which he immediately named "The Graff Pink."
Last year, the company earned nearly half its $755.6 million revenue from just 20 customers.