Retail Refugees

Rumor has it that Prada may fall into the hands of top three luxury conglomerate, Richemont…  According to Luxist, “Prada has been struggling with its finances for a while. For a time the brand was flirted with going public but the IPO kept being delayed. Last summer it renegotiated some of its debt in order to have cash available to open more stores. The brand’s debt of 450 million euros was extended to 2012. Prada’s majority owners are Miuccia Prada, the label’s designer and her husband and Prada chief exec Patrizio Bertelli. The NY Post reports that the potential deal would have Prada surrendering around a third of the label to Richemont. Richemont would be taking a passive stake but there is the possibility that the luxury conglomerate could eventually take over the whole brand.

The Prada name continues to have a lot of clout in the luxury fashion world and so the acquisition would be a feather in the cap of Richemont. Richemont is probably also one of the few groups with enough money to pay Prada’s high price. Last summer Italian lenders valued Prada at around $3.8 million. The deal would potentially also give Prada the ability to tap into a larger luxury group and expand into China and other markets more quickly. The only question is how well Prada and Bertelli will fit into working with Richemont. The designer and her executive husband are accustomed to having total control over the brand and the direction it takes but if they can work well with Richemont it could be a formidable alliance.

UPDATE: A Businessweek story includes a quote from a Prada spokesperson denying the NY Post story and saying that Prada is not for sale.”