Italian luxury-goods company Prada Holding BV reported a 16% increase in sales at Jil Sander AG, the German fashion group that has been one of its most troubled acquisitions.
Jil Sander said 2000 sales totaled 264 million marks ($119.4 million), while net income rose 17% from a year earlier to 9.5 million marks, marking the biggest such increase the group has posted in several years. “Our first year has been positive” said Prada owner Patrizio Bertelli. “We have rationalized the distribution network, cut personnel and better integrated production.”
Jil Sander has been one of Prada's more difficult acquisitions. Founder Jil Sander sold control to Prada in September 1999 and was to have remained as creative director. However, Mr. Bertelli and Ms. Sander clashed bitterly from the start, and the German designer brusquely abandoned her group just five months after the sale.
At a news conference Wednesday, Mr. Bertelli was keen to respond to questions on Jil Sander's performance and, by extension, assert that he can successfully apply Prada's winning formula to the raft of brands he has bought in the past two years. Prada also has acquired Church & Co., Helmut Lang and 51% of Fendi through a joint venture with LVMH Moet Hennessy Louis Vuitton SA.
Mr. Bertelli said Prada has raised the efficiency of Jil Sander's distribution, production and retail systems, which he described as woefully inadequate under Ms. Sander's direction. Ms. Sander couldn't be reached for comment. Jil Sander has opened nine shops in the past year and will invest about 138 million marks in five new stores this year. Prada also spent about 70% more on marketing Jil Sander last year than was spent in 1999.
Mr. Bertelli also discussed Prada's hotly anticipated initial public stock offering. Laden with debt and facing enormous capital expenditures to relaunch the new brands, Prada could pocket as much as $2 billion from the planned IPO. However, many analysts wonder whether Prada should go public with its multibrand strategy still unproven.
