Last night, Crude Oil Broker quizzed me on why companies should theoretically be funded by debt rather than equity (FNCE101: cost of debt < cost of equity, taxes). Perhaps this is why Prada seems to have taken on so much debt in recent years — and its impending IPO is, well, still impending.
So, the NY Post released the gossip yesterday: Swiss luxury goods company Richemont, which owns Cartier, Piaget, and IWC, seems to be eyeing debt-ridden Prada.
Prada, on the other hand, has duly denied this report.
Frankly, I’d be a little sad to see one of the few remaining family-owned luxury labels being sold off to a conglomerate. Everyone knows about my ridiculous obsession with huge conglomerates, but this really would be rather sad. We’ll have to watch how this plays out in the next few months.