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Prada has said that it’s still trying to reposition Helmut Lang and has therefore shuttered some unsatisfactory wholesale accounts. A Prada spokesman said that closing those accounts, along with macroeconomic factors such as a strong euro, SARS and the Iraq war, hurt Helmut Lang’s most recent sales figures.
In its 2003 balance sheet, Prada said Helmut Lang sales showed the biggest drop of the group’s brands, falling 33.1 percent to 27.85 million euros, or $34.53 million. Clothing accounted for 77 percent of sales, with footwear and leather goods — product categories that have been developed with Prada — comprising 17.4 percent and 4.8 percent of the business, respectively. (Dollar figures have been converted from the euro at current exchange.)
And retailers often cite good sell-throughs for the collection.
“It’s certainly a collection for us that has a cult following with our customers. He does what he does even if it isn’t necessarily in sync with the rest of fashion,” said Anna Garner, head of fashion at Selfridges. “But it’s a very reliable collection that our customers come back to whether it’s a more androgynous season or not. The men’s wear is very strong and the women’s has been up and down, but we’re enjoying a good season for the women’s wear now.”
Prada bought a majority stake in Lang’s business in 1999, as the luxury goods M&A market peaked. At the time of the deal, sources estimated the wholesale volume of all of Lang’s products was close to $100 million in 1998. Lang told WWD in 1999 that he teamed up with Prada to focus more on the creative side of the business. “For me, I think it is a good development. It is the structure which is necessary at the moment,” he said.
Analysts said they don’t have enough financial information to value the Helmut Lang business, as Prada does not break down operating profits or debts by brand. But it seems unlikely that Prada made a significant outlay to buy the residual Lang stake because the Italian company has been concentrating on reducing its debts. Prada has said it wants to carry out a thrice-postponed initial offer sometime before June of next year. That’s when 700 million euros, or $867.79 million, worth of bonds are due.