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Prada IPO Future Uncertain

Prada chief Patrizio Bertelli decided to delay the company’s planned initial public offering for a fourth time while saying for the first time that selling the Jil Sander and Helmut Lang brands was an option.

MILAN — Prada chief Patrizio Bertelli decided to delay the company’s planned initial public offering for a fourth time while saying for the first time that selling the Jil Sander and Helmut Lang brands was an option.

In an interview with Italian newspaper La Repubblica last week, Bertelli said an IPO next year was also ruled out.

“After that, we’ll see,” said Bertelli.

This is the first time Bertelli firmly said a Prada listing will not happen in 2005. Until now, Bertelli said if market conditions allowed, he would go ahead with an IPO before June 2005, which is when convertible bonds worth 700 million euros, or $900 million at current exchange, are due.

The bonds are guaranteed by a pool of Italian banks. Bertelli declined comment for this article.

As previously reported, Riccardo Stilli’s departure last month as chief financial officer was viewed as a sign Prada was stalling its public listing. Stilli was considered pivotal to the IPO project. In the interview with La Repubblica, Bertelli admitted Stilli’s resignation was connected to a new course for Prada. “There were no clashes [with Stilli]. Stilli was “focused on the listing…Now we move on to another phase,” said Bertelli.

A luxury goods analyst here who spoke on condition of anonymity, said the postponement was to be expected in light of Stilli’s departure. “If Bertelli manages to continue to boost its business through the Prada and Miu Miu brands, and to pay back the bonds some other way, he might never list the company,” said the analyst, who believes Bertelli does not view the Bourse as an ideal and ultimate solution.

“Weighed down by the problematic Jil Sander and Helmut Lang businesses, he thinks the market will underestimate the group,” said the analyst.

Conversely, luxury goods consultant Armando Branchini said Bertelli is merely waiting for the “most opportune moment” to list the group. Branchini praised Bertelli’s decision. “It’s a good move: he wants the market to acknowledge the value of his company,” said Branchini.

Speculations about Prada going public emerged in the spring of 2000. In July 2002, after three postponements caused by rocky market conditions, Bertelli decided to hold the listing until a more favorable time, relying on other means to raise cash, such as selling off some real estate.

In the interview with La Repubblica, Bertelli also shed light on the reasons for Jil Sander’s departure two weeks ago — her second in four years — attributing the split to the designer’s disagreement with Prada’s focus on the bottom line.

“Jil had a very unique view which was not in line with the strategy of a group, which pursues goals and results,” he said. For the first time, Bertelli said he did not rule out the sale of either the Jil Sander or Helmut Lang brands. One source familiar with the situation said Bertelli is looking at selling the two businesses, perhaps to a closed-end fund or, in the case of Jil Sander, to the designer herself.

— Luisa Zargani