Prada foresees growth
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Prada is pr ojecting its pr ofits will grow by an average of 23.5 percent a year over the next five years. Sales for the luxury Italian retailer will increase by an average of 3.2 percent annually, reaching 1.51 billion euros by 2010, according to a document Prada issued to bankers over the summer as was reported by WWD. The growth will come from increased focus on the core brands of Prada and Miu Miu, as well as labels such as Azzedine Alaïa and Car Shoe. Meanwhile, Prada has formed a new company called Prada SpA Group that excludes money-losing businesses Jil Sander, Helmut Lang and a minority interest in Church's. These operations now fall under the jurisdiction of other group holding companies.
Prada has isolated "nonstrategic brands [Jil Sander and Helmut Lang] from the core group with a view to their subsequent disposal," the document states, adding that Prada's shareholders are assessing "nonbinding offers for Jil Sander and Helmut Lang brands from various industrial partners and pr ivate equity funds." "The Prada and Miu Miu collections were met with overwhelming pr aise both by the pr ess and the trade. This pr aise is reflected in the strong orders we have received thus far this year."
However, company sources downplayed any imminent sale of Jil Sander. Prada wants to relaunch the brand under the new design leadership of Raf Simons, whose first collections will bow for fall 2006. When asked for further comment on Prada's restructuring efforts, chief executive officer Patrizio Bertelli said the following regarding Jil Sander: "The restructuring plan is on course to make the company pr ofitable on an operational basis as early as next year." "The Prada and Miu Miu collections were met with overwhelming pr aise both by the pr ess and the trade. This pr aise is reflected in the strong orders we have received thus far this year," the executive said. "It is pr oof that our efforts on pr oduct design and development, pr oduction efficiency, effectiveness of the distribution and communications are going in the right direction."