PRADA desperately searches re-financing solutions

PRADA group, owned by Miuccia Prada and her husband Patrizio Bertelli is seeking urgent solutions for its EUR 1,2 billion lines of financing. A group lead by Intensa Bank is currently looking at ways to reduce debt. At the moment the entire cash flow of Prada goes to the banks. Prada opened 34 new directly operated stores in 2009 so far and has scheduled other openings. We believe Pradas strategy to open directly operated stores in Eastern Europe and South America in the coming 2 years will take its toll and diminish its competitive advantage in front of Hermes and Gucci, the only real competitors.