Soon, Everyone Can Buy Prada

I Pellettieri d'Italia S.p.A. (Milan), the company familiarly known as Prada, is expected to announce an initial public offering this week.

The IPO, through which the fashion house would sell 30 percent of itself in an effort to pay down some of its debt, is scheduled for midsummer. It is expected to raise about $1.2 billion. The company owes about $1.1 billion, mostly through costly acquisitions (including Jil Sander, Helmut Lang, Church's shoes, Azzedine Alaia and Carshoe, plus Fendi, which it later sold to LVMH Moet Hennessy Louis Vuitton) and the expansion of its retail empire. It now owns 150 boutiques in New York, San Francisco, Los Angeles, Paris, Milan and Tokyo, and its much-publicized Rem Koolhaas-designed store in New York's SoHo cost an estimated $40 million.

This would be the third time that the company planned to launch an IPO. Twice in 2001, because of an economic slowdown and the events of September 11, Prada canceled its plans. But in November, strapped for cash, it sold a 25.5 percent stake in Fendi to LVMH for $260 million. In December, Deutsche Bank underwrote a $624.1 million bond sale that can be converted into Prada shares when the company goes public (providing it's within three years).

Sales of luxury goods have flattened in the last eight months, though Prada ceo Patrizio Bertelli says sales have begun to rebound. He insists that the company's sales have risen by double-digit amounts in the U.S. and Japan.