
That time Prada tried to create an Italian luxury group
A long and problematic saga that had Jil Sander and Helmut Lang at its center
January 13th, 2025
Throughout the weekend, speculation and theories swirled about the rumor of the possible acquisition of Versace by the Prada Group. A merger that would bring together two legendary brands under one roof, marking the Group's return to expansion after the complicated saga that, in the early 2000s, saw the Group acquire a large number of major '90s minimalism names only to sell them a few years later in a tangle of situations and clashes between designers and businessmen that led Patrizio Bertelli himself to say years later: «I made a mistake with Jil Sander and Helmut Lang». However, while Lang’s brand struggled due to a creative director increasingly reluctant to conform to fashion's corporate logic, it was with Jil Sander that all the challenges faced by a luxury group in its infancy emerged. Years after the incident, Sander herself told the International Herald Tribune: «It was a very tough time for me. [...] I learned early on how profound and difficult fashion can be». But let’s proceed in order. In the late '90s, Prada was coming off a series of major commercial successes and expanded aggressively to compete with LVMH, which was already huge at the time but not as enormous as today; and Gucci Group, the predecessor of Kering. Among the main acquisitions were 51% of Helmut Lang for $40 million, full control of Jil Sander for $105 million, Church’s for $170 million, as well as Alaia and Genny. Prada also formed a joint venture with De Rigo for eyewear production and, together with LVMH, acquired a majority stake in Fendi, contributing $241.5 million to a deal valued at $520 million overall. But Fendi’s financial difficulties and accumulated debts began to strain Prada’s resources, leaving it heavily indebted and prompting it to plan an IPO in 2001, which was later canceled after 9/11. By 2007, the dream of an Italian luxury group had faded: Prada had divested from Jil Sander, Helmut Lang, and Alaia, and had “put Genny on hold” to focus on stabilizing its finances while recovering from the debt accumulated with the Fendi operation, selling partial stakes in brands like Church’s to relieve financial pressure for years. But how did it all start?
The summer of 1999 marked a turning point in the fashion industry: Jil Sander, a cult designer who had founded her brand thirty years earlier, announced she had entered into business with Prada, which had acquired a majority stake in her brand. As WWD reports, Patrizio Bertelli had been pursuing Jil Sander for over three years, hoping to make her the cornerstone of a new luxury conglomerate. In August 1999, after lengthy negotiations, Prada acquired 75% of Jil Sander’s ordinary shares and 15% of its preferred shares. The deal marked the birth of the first private luxury goods group in Italy: Prada, Jil Sander, the joint venture with Helmut Lang, eyewear producer De Rigo, and an initial stake in Church’s. Although financial terms were not disclosed, analysts estimated that Bertelli had paid around $110 million for control of the company. Jil Sander’s decision to sell was driven by a desire to secure the brand’s future in an era of consolidation within the fashion industry. Ideally, the designer wanted to focus exclusively on creative aspects, leaving operational management and strategic growth to Prada. Sander retained the role of CEO and creative director, while Bertelli took over as chairman of the supervisory board. A key area of interest in the partnership was the production of Jil Sander accessories, which at the time accounted for less than 3% of total sales and were produced under license with Goldpfeil, a struggling German company. Integration into Prada’s ecosystem, which prioritized direct control over production and distribution, offered the opportunity to expand the accessories sector to 20-30% of overall sales.
Jil Sander Fall 2000 pic.twitter.com/ZHgR9T1CX9
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The acquisition was part of a broader expansion strategy orchestrated by Bertelli. In addition to Jil Sander, Helmut Lang, and De Rigo, Bertelli increased his stake in Church's and explored collaborations with other brands. But several things did not work out: in addition to the problematic Fendi, a collaboration attempt with Gucci in 1998 also failed, forcing him to sell 9.5% of his shares in the brand to LVMH for 140 million dollars. But the collaboration with Sander also didn’t start well: although initial reports talked about 16% growth and profits of 4.2 million dollars in 2000, Sander, known for her inflexible standards and creative independence, clashed with Bertelli’s management style and strategic vision. The tension culminated in January 2000, when Jil Sander suddenly left her company due to what was said to be a strategy of radical cost cuts that Bertelli wanted to implement. The news shocked the fashion world, as many believed the brand’s identity was deeply linked to Sander’s personal touch. At the time, Bertelli said: «A strong brand like Jil Sander doesn't need to rely on the name of a designer. It's not the name that matters, but the quality of the product». He then appointed Milan Vukmirovic, former buyer of the Parisian boutique Colette, as creative director. The media reaction was, in a word, hostile – Sander was then and still is a beloved designer, respected to the point of reverence, and the idea of dissociating her from the brand that bore her name since 1968 angered both the press and the public. The media uproar soon became a sales problem.
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Bertelli planned to finance these acquisitions through an IPO, scheduled for September 2001. However, the timing proved disastrous. The September 11 attacks triggered a global economic crisis, causing a collapse in the luxury goods market. Prada was forced to withdraw its initial public offering, finding itself with a debt of 1.7 billion euros, an amount equal to its annual turnover at the time. By the end of 2001, the company was in a precarious financial position, with its ambitious growth strategy halted. Despite the difficulties, Bertelli remained resolute. He justified the company’s high debt level by attributing it to acquisitions rather than poor management. Bertelli explained: «Our debt is not due to poor management or operational losses. We made a series of acquisitions, and the IPO was meant to finance these programs. No one was prepared for September 11». In the following years, the company worked to restructure its finances. Bertelli predicted that Prada's debt would be halved to less than 1 billion euros by the end of 2004. However, the strengthening of the euro posed another challenge, making European luxury goods more expensive for American consumers. In July 2002, Prada acquired the remaining 25% of Jil Sander, thereby consolidating total control of the brand after acquiring 75% two years earlier. This acquisition gave Prada full operational and strategic control of the brand but highlighted all the difficulties of managing a cult brand without the original founder.
In 2003, due to stagnant revenues and increasing losses, the Prada Group was forced to recall Jil Sander to the creative helm. Despite the return of the founder, financial problems persisted: in 2002, the brand had recorded revenues of 138.8 million euros, but with a net loss of 26.3 million euros. In 2003, even with Jil Sander's presence, the brand failed to reverse the negative trend, continuing to suffer a decline in profitability and a perception of losing its stylistic identity from the public and industry experts. The brand, which at the time was positioned in the high-end market alongside Hermès and even above brands like Gucci and Prada, as explained at the time by MF Fashion, seemed to be progressively losing its status. In 2004, the definitive separation between Jil Sander and Prada occurred due to strategic and financial differences: although Bertelli and Sander appeared reconciled, the designer remained firm in her desire to operate without a fixed budget – according to the New York Times, there were also issues related to compensation and the Group's investments in the brand. According to sources at the time, the designer refused to approve a business plan that included aggressive cost cuts, which were necessary because the company was in the red.
When Jil Sander finally left the brand, the company reported a loss of 30.6 million euros. As WWD recalled at the time, similar issues had also emerged between the Pinault family and the Tom Ford-Domenico De Sole duo, leading to their departure from Gucci. To make matters worse, in 2005, the Prada Group announced a total loss of 42 million euros, despite double-digit growth in sales for Prada and Miu Miu. The difficulties of Jil Sander and Helmut Lang had impacted the Group's finances, which had to juggle between the vast sums coming from its own brands and the financial hemorrhage caused by the acquisitions, which had now become a burden. Patrizio Bertelli tried to reassure investors, announcing a restructuring plan and the intention to increase revenues through the main brands, but the situation remained critical. In 2006, Jil Sander reported revenues of 130.4 million euros, but with net losses amounting to 37.3 million euros. In the following years, the brand accumulated losses exceeding 137 million euros in total, and revenues never returned to the levels seen in 2000. In the end, the Prada Group decided to sell Jil Sander in 2006 to Change Capital Partners, a private equity fund based in London, which later sold it to the OTB group, which still owns it and has led it to a new phase of prosperity after years of uncertainty. Less than three months after the sale of Sander (who had left the brand two months before Lang’s departure), the group sold Lang (Forbes headlined with the verb "disposes of…" as if it were a corpse), and a year later, in the summer of 2007, Azzedine Alaïa bought back his brand from the group. The dream of an Italian luxury conglomerate under the Prada Group's umbrella seemed to be over, but it was precisely the decision to focus on its own brands that ultimately saved the entire group, which has maintained more or less the same structure it had at the time and today has become one of the few still experiencing robust growth amid a profound crisis in luxury.