Richemont/Prada Deal Rumor: Might Not Be True, But Let’s Hope It Is

Execs at Prada have vehemently denied the NY Post report that luxury goods conglomerate Richemont might scoop up a 30% stake in the company, which has amassed $1.7 billion in debt after failed acquisitions of Jil Sander (now owned by private equity firm Change Capital Partners) Helmut Lang (now owned by Link Theory Holdings) and others over the last two decades. I–and my sources–are not so sure that the report is true, but I’m also not going so far as to say that I think it’s “silly,” as an anonymous person did in WWD this morning. They’ve most certainly talked to Richemont over the past six months.

Why? Because they’ve had to. The fact is, Prada is in some deep sh*t and they need a trustworthy company with lots of money to help pull them out. While designer Miuccia Prada remained a critical favorite over the last decade, her husband–CEO Patrizio Bertelli–is seen by industry insiders as somewhat of a piranha. Along with the bad business decisions Bertelli’s made–numerous attempts at an IPO, poorly executed acquisitions and increasing the price point of the Mui Mui diffusion line, thus losing the entry-level luxury consumer as a customer–the label has also gotten flack for its diminished quality and questionable labor practices (best illustrated in Dana Thomas’ 2007 investigation Deluxe: How Luxury Lost Its Luster).

Do I think Richemont is the right conglomerate to pull Prada out of the red? Maybe. Like the Post says, it’s marquee brands are jewelry and watch makers, including Cartier, IWC and Van Cleef and Arpels.

However, Richemont also owns well-regarded and popular fashion labels Chloe and Alaia, which Prada would fit well with. However, as much as Prada could use the added infrastructure sure to be provided by Richemont, in the end it will be a private investor that saves the company. I just can’t see Bertelli giving up that much control, unless there’s some sort of hostile takeover.

Ask An Expert: Which Runway Trends Have Made It To The Mall This Season?

A look from Lanvin resort 2010, via Style.com

In this new series, I ask my best sources to offer up insider knowledge.

Brian Sozzi isn’t afraid to admit that he likes to shop…at the mall. The equity research analyst covers retail for boutique firm Wall Street Strategies. When he’s not crunching numbers, he’s in the stores researching trends, consumer behavior, product selection and quality. This season, he likes what’s available: “Broadly speaking, I happen to think fashion in the malls is the strongest I have seen in some time.”

Why is that? Well, consumers haven’t been buying, so retailers diversified product, listening more to the messages designers send down the runway. Here are some of the high-fashion inspired trends that Sozzi thinks will sell well in the stores:

Latin America. (As seen at Michael Bastian spring 2010; Lanvin resort 2010)  Anthropologie’s embroidered patchwork tunic adds a vintage flair with mismatched floral prints.

Military. (As seen at Haider Ackerman spring 2010, Chloe spring 2010) Old Navy’s cargo pants are back as are fatigue jackets, available at J.Crew.

Plaid. (As seen at DSquared fall 2009, Richard Chai spring 2010) The Gap is big on plaid this season, as are Uniqlo, American Eagle, Topshop and of course, Abercrombie & Fitch.