Byline: Samantha Conti

This is the year Prada has had to pay the piper.
A rapid-fire acquisitions binge transformed Prada from a fashion house into a multibrand luxury group. It has begun to assimilate and restructure its new brands — no easy task in this bleak economic environment — but it’s also carrying a massive debt load of $1.16 billion, and it’s causing chief executive officer Patrizio Bertelli to consider some financial alternatives.
Prada has also been forced to put its initial public offering on hold until the financial markets bounce back. The IPO was originally planned for last spring.
The first half of 2001, while not as dynamic as in past years, was still a good one for Prada, which registered growth of 24.9 percent to $800 million — due mostly to the twin engines of Prada and Miu Miu. In addition, the company added Azzedine Alaia and Carshoe footwear to its stable of brands.
Bertelli, too, was upbeat. He said during a news conference at the end of June that due to the slowdown in the American economy, there would be rough sailing ahead for all luxury brands, but that Prada was a strong company and would be insulated from the cold.
“This is not the disastrous stock market situation we saw in 1997, nor is it Italy in the Seventies, with union strikes and the Red Brigades,” he said. “We must consider the market our adversary — something that must be controlled and tamed. Quick reflexes are essential, and we’ll all have to perform under pressure.”
The second half began on a high note for Prada. The company reached its sales targets in July and August, and Bertelli made headlines with another major acquisition: Genny Group. In August, he told WWD he had every intention of revitalizing the Genny and Byblos labels and would use their high tech production facilities for other brands in Prada Group.
Following the Genny acquisition, there was even talk of Bertelli buying the trendy Italian sneaker company Superga. During the first week of September, and despite the worsening economy in the U.S., Bertelli was still upbeat. The IPO was likely going forward, and Bertelli was describing himself as a market “warrior” ready to take on the tough times.
Then came Sept. 11, and Bertelli had to eat his words. He was forced to postpone the IPO indefinitely, lower his year-end sales projections and do something he never wanted or intended to do — start selling his new brands.
At press time, Bertelli and his banks were planning a bond issue for approximately $616 million to offset part of the group’s debt and help carry the company through to its IPO.
At the end of November, he sold his 25.5 percent stake in Fendi to LVMH Moet Hennessy Louis Vuitton for about $260 million payable over four years. Sources say he is shopping around the Helmut Lang and Jil Sander labels and that Prada is in talks with LV Capital, the venture capital arm of LVMH, specifically regarding the sale of Sander. Bertelli last week denied he was in talks with LV or anyone else about selling Sander.
Last month, Bertelli told WWD that he has no intention of selling any of the brands in his stable.
But that might be a luxury he can no longer afford. While Prada is now expecting 2001 sales to rise 7 percent in dollar terms to more than $1.5 billion (converted from the lira at current exchange rates), its growth has slowed considerably. Last year, sales rose 56.6 percent to 3.17 trillion lire, or about $1.4 billion at current exchange.
Prada is also facing the consequences of restructuring its divisions. The company has announced that Jil Sander will have a net loss this year, before taxes, of $5 million to $8 million due to a decrease in sales. Prada has also pledged $17.6 million in additional capital in order to shore up Sander’s equity base.
Despite the cold showers of 2001, Bertelli remains confident about the future.
“If the situation we find ourselves in stabilizes — if there are no more terrorist attacks — we’ll see an upswing in the second half,” the Prada chief said. “My feeling is that, by February, we should start seeing some improvement.”

YSL’s Nu Image
At the launch party for Yves Saint Laurent’s fragrance, Nu, held at La Bourse during this summer’s Paris couture week, guests were treated to samples of the scent and a whole lot more. Encased in a massive Plexiglas cylinder, scores of dancers, naked but for flesh-toned thongs, writhed in the most graceful ecstasy — a state that took three days of rehearsals to master. According to Tom Ford, however, the name Nu (yes, French for nude), “is not only about nude as in the skin, but nude as to be bare, stripped away.”

Azzedine Again
He’s back. For the first time in years, Azzedine Alaia returned with characteristic disregard for the fashion cycle: He showed ready-to-wear during the fall couture collections. Though he didn’t go for the flash and sizzle of his most editorial work, his clothes offered high chic along with a clear reminder that with great clothes, you don’t need bells and whistles.

Happy Birthday Ungaro
The house of Ungaro turned 35 this year, and to celebrate, Emanuel Ungaro threw a Turkish-themed party at New York’s Seventh Regiment Armory on Lexington Avenue in early September. Shortly after, he officially passed the design reins for the ready-to-wear, diffusion and accessories lines to his 34-year-old creative director, Giambattista Valli. (Ungaro remains at the couture house.) “You have to be modern today, to be conscious of what’s happening,” Ungaro said. “There’s a new generation.” Here, a look from the fall couture collection.

Home of the Brave
More than 700 people gathered at Cipriani for the New Yorkers for Children Fall Gala just a week after the Sept. 11 attacks. Honorary Chair Mayor Rudolph Giuliani (pictured here with Judith Nathan) was the man of the hour, wowing the crowd with a heartwarming speech. Wringing an immigrant’s tale for all it’s worth, Giuliani said: “When my grandfather came to this country, he was not sitting there with his little bag and $20 in his pocket saying, ‘I’m a-goin’ to New Jersey.”‘

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