MILAN — Prada is eyeing an initial public offering again — this time for the first quarter of 2012.
While the brand has been down this road before, the company has several reasons to make it happen on the fourth attempt. First, the timing coincides with the expiration of Prada’s loan of 450 million euros, or $556 million at current exchange, granted by a string of banks — Intesa Sanpaolo, UniCredit, Calyon, Banca Leonardo, Banca Popolare and Centrobanca. In August, the lenders agreed to postpone the term payment initially due to be repaid in two installments, one in July 2009 and the other the next month.
Second, Prada’s business continues to boom. According to a spokesman, the Prada Group today is valued at 3 billion euros to 4 billion euros, or $3.7 billion to $4.95 billion, a valuation that could further increase in the next 18 months.
“The first semester of 2012 will be a turning point because of the expiration of the loan, but right now, Prada is showing gratifying and comforting signals,” said the spokesman.
While the IPO will depend, as always, on market conditions, Prada is reaping the benefits of its plan to invest in directly operated stores. The aim is to generate more than 70 percent of consolidated turnover from directly operated stores next year.
In the first quarter ended April 30, the group’s revenues rose 26 percent to 366 million euros, or $452 million, exceeding budget expectations.
In a possible further sign of Prada’s increasing interest in an IPO, Davide Mereghetti, a top manager of important corporate clients for UniCredit, recently joined the firm’s board, succeeding Brian Blake, formerly chief operating officer.
Elsewhere, Prada is upping its virtual ante with the launch of e-commerce in the U.S. and Puerto Rico on Thursday, coupled with a richer online catalogue. The service will be expanded to Japan shortly.
Prior to the upgrade, purchasing Prada online was strictly a European affair with a limited selection, which has been quadrupled and now includes men’s accessories. The choice spans from entry-level pieces to exotic skins such as crocodile and ostrich.
There are no plans to introduce online sales of apparel, however.
“We’re latecomers in this area, but that’s because we kept to our strategies of doing things well and when we’re ready,” said Sebastian Suhl, chief operating officer of Prada SpA. “Now the offering is on par with that of any Prada store and we see gigantic potential in it.” Suhl declined to reveal a first-year sales forecast, but said the objective for prada.com is to become just as profitable as any top flagship.
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