I Pellettieri d’Italia S.p.A. (Milan), the company that does business as Prada, confirmed it has entered talks to sell its unprofitable Helmut Lang brand.
Prada bought 51 percent of Helmut Lang in 1999, when it was in an expansive empire-building phase under the direction of ceo Patrizio Bertelli (husband of Miuccia Prada, the company’s designer and granddaughter of its founder). Prada also bought the Jil Sander fashion house and purchased the rest of Helmut Lang last year.
Bertelli is credited with turning Prada into a multi-brand luxury goods company, but the Helmut Lang and Jil Sander brands have never been profitable.
Helmut Lang has flagship stores in New York, Paris, Vienna and Milan and also sells its products in high-end department stores. Lang, the Austrian-born designer, remained with the company until January 2005. Prada gave no reason for his departure at the time, though industry analysts said he might have clashed with Bertelli. Jil Sander left the company late last year, for the second time.
A Prada spokesman would not say what companies were in talks for Helmut Lang or what the brand might be worth. The proceeds of the sale would certainly help shore up Prada’s balance sheet at a time when the luxury goods industry is confronting a slowing world economy and a flood of inexpensive Chinese products. The company had sales of $1.76 billion in 2003 (2004 financial results have yet to be released). Prada and its high-end fashion competitors are battling both low-cost Chinese goods and low-quality knockoffs of their products. While some European companies have responded by moving production to China and other low-wage countries, Prada still produces all its shoes, belts, handbags, clothing and other items in Italy.