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MILAN — First Prada parted with Jil Sander, now it’s bidding farewell to Helmut Lang.
Less than a month after selling Jil Sander, Prada has inked a deal to sell the Helmut Lang brand, WWD has learned. An announcement is expected as early as today.
This story first appeared in the March 17, 2006 issue of WWD. Subscribe Today.
The name of the buyer could not be learned, but sources in New York indicated that it is a Japanese company. Prada declined to comment Thursday.
Prada essentially is selling a trademark, since the group gradually dismantled the Helmut Lang business after its namesake designer left the label in January 2005. Prada has shuttered production of the collection, famed for its sharp lines, abstract shapes and dark denim, and closed all the brand’s stores except for a lone boutique in Paris that sells leftover stock. Prada closed Helmut Lang’s New York office last March.
The designer’s departure and Prada’s desire to sell the label ignited a swirl of speculation about potential buyers, the return of Lang and links to other designers. This week, Jane magazine reported on its Web site that Alexandre Plokhov, designer of men’s wear line Cloak, was headed to Helmut Lang. (Jane, like WWD, is owned by Condé Nast Publications.) A source close to the situation indicated that a buyer interested in Helmut Lang had contacted Plokhov.
Plokhov could not be reached for comment.
Prada Group bought 51 percent of Lang in 1999 and the remainder in 2004. Sources at the time said Lang couldn’t come up with the cash to fund his portion of a badly needed recapitalization of the business, so Prada bought him out.
Prada initially sought to develop the label worldwide, in part by opening Helmut Lang stores here and in Paris, but the brand faltered. The most recent figures available show that Helmut Lang’s sales declined through the years to 24.8 million euros in 2004 — the most recent figure available — from 46.3 million euros in 2001.
Prada explained the drop as a logical consequence of its strategy to reposition Helmut Lang and close some unsatisfactory wholesale accounts.
Like many other large luxury goods groups reassessing their portfolios, Prada has chosen to divest itself of its money-losing brands, the remnants of an acquisitions spree of years past. Last year, Prada finally acknowledged what the markets already knew: that it wanted to sell its noncore Jil Sander and Helmut Lang brands and focus on its more lucrative Prada and Miu Miu businesses.
Prada sold Jil Sander to a London private equity fund, Change Capital Partners, last month for an undisclosed sum.
There has been plenty of talk in financial circles here that Prada’s banks had been pressuring the group’s chief executive officer, Patrizio Bertelli, to sell Jil Sander and Helmut Lang to help pay off debt. Prada’s flirtation with a stock market listing has yet to come to fruition and many in the market doubt it ever will.
ITMD Investments, the company through which the Prada family and Bertelli hold their stakes in Prada Holding, owes the banks 800 million euros, or $960 million at current exchange. Prada’s balance sheet for 2004 indicated that its main operating subsidiary had debt of 818 million euros, or $981.6 million. Prada has yet to release financial figures for 2005, which are expected to reveal an improvement in the debt level.