MILAN — Positive yearend financial projections had Prada chief Patrizio Bertelli in a decidedly upbeat mood during a roundtable discussion organized here by luxury goods consultant Carlo Pambianco.
This story first appeared in the November 7, 2003 issue of WWD. Subscribe Today.
But as for the big news of the week — the resignations of Gucci Group’s Tom Ford and Domenico De Sole — Bertelli said he hadn’t expected “it would get to this. It’s a very delicate situation. I hope they will rethink their decision. I had gotten used to the competition with Gucci, which always pushed us to do better.”
Bertelli and De Sole exchanged greetings when the latter appeared in a video conference during the meeting, which focused on branding and competition in fashion. Asked by the press about whether he was planning a future with Ford, De Sole said they were “both professionals who negotiated their contracts in good faith and did not have plans yet.”
De Sole praised Bertelli and Diesel chief Renzo Rosso, also present, for the way they balance innovation and the commercial side of their businesses.
On the sidelines, Bertelli said Prada expects a 45 percent increase in net profit to $57.2 million, or 50 million euros, this year. Sales will be in line with 2002, when they were $1.79 billion, or 1.57 billion euros. Dollars are converted from euros at current exchange. Prada expects 2003 earnings before interest, tax, depreciation and amortization to reach around $228.8 million. By yearend, Bertelli said he expects to reduce the group’s debt to $743.6 million, or 650 million euros, from $1.06 billion last year.
Bertelli said he plans to sell 55 percent of the British footwear firm, Church’s, to Swiss Equinox Investment shortly. This adds 10 percent to the original 45 percent stake agreed to in a preliminary agreement drawn out last April. “Prada will maintain control of the board of directors, however, and continue to develop the brand,” said Bertelli, who also reiterated that, by yearend, Prada will acquire the Miu Miu license, currently held by the family.
As for the public offering, Bertelli said the project “has not been put away,” and that he will “start examining the papers again in January” for a possible IPO in 2005. Bertelli denied a press report stating he was planning to list the company on Wall Street. “It will be a listing made in Italy,” he said.