PRADA’S PROPOSAL: If Prada goes ahead with an initial public offering this summer, June 17th would be the earliest date the fashion house would kick off its road show, a source familiar with the matter told WWD on Monday. Stops on the road show would include Milan, London, Edinburgh, Frankfurt, Paris, Zurich, New York, and possibly Boston. The source speculated that Prada will probably float no more than 40 percent of its shares.MOODY’S GAP MOOD: Moody’s Investors Service shifted gears on Gap Inc. and changed its outlook on the firm’s debt to negative from stable. The shift was attributed to ongoing weakness in same-store sales, concerns that the firm will miss profit expectations for the year and the possibility that whoever replaces president and chief executive Millard?Drexler “could make changes that require currently unanticipated expenditures, changes or revisions in operations.” The rating agency confirmed Gap’s senior implied rating of Ba2, the second step into speculative or “junk” territory. Moody’s noted, though, “operating cash flow has been bolstered by more disciplined inventory control, expense reductions and the cessation of share repurchases.” Gap also is planning a “relatively low” uptick in square footage for 2002.ART SALE AT BARNEYS: As if selling fabulous frocks weren’t enough, Barneys New York is now turning its eye to art. For the next week and a half, Barneys New York is showcasing the artwork of 13 disabled artists from the Creative Growth Arts Center. The 26 pieces of art are for sale with proceeds going toward the CGAC and the participating artists.KMART’S CASE: Kmart employees were instructed to record transactions in violation of generally accepted accounting standards, according to an Associated Press report citing the anonymous Jan. 9 letter that recently triggered a federal investigation of the bankrupt retail giant. Kmart officials could not be reached on the Memorial Day holiday Monday for comment. The wire service reported that the January letter, from individuals purporting to be Kmart employees, said, “We are now closing our books for the full fiscal year making even more improper entries. We have been clearly told that questioning any accounting practices will be viewed as unacceptable team behavior.”SCAMMING SEPHORA: An employee of Sephora U.S. has been arrested and charged in connection with a scheme to embezzle $519,000 from the beauty retailer, according to detective Valerie St. Rose, a New York City Police Department spokeswoman. Judith Roberts, 33, who worked at the retailer’s East 58th Street headquarters, was arrested Friday after being located in Mobile, Ala., according to St. Rose. Roberts allegedly submitted false invoices and records, enabling her to embezzle the funds from September 2000 to July 2001, the detective said. Roberts was charged with second-degree grand larceny, criminal possession of stolen property and forgery, according to police. Sephora executives could not be reached for comment Monday.

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