April 2. 2009

Luxury brand Prada has seen its sales suffer and is facing reorganization regarding $1.6 billion dollars in debt. They wish to undertake reorganization in a bid to free up money to open new stores.

Prada May Reorganize Debt to Fund New Stores as Sales Suffer

April 2 (Bloomberg) -- Prada SpA’s owners may ask banks to reorganize 1.2 billion euros ($1.6 billion) of debt, freeing cash to open new stores and promote the luxury label’s brands in the recession, two people with knowledge of the plans said.

Sales at stores open at least a year fell in 2008, reducing Prada’s cash on hand, while earnings declined as fixed costs rose, the people said. The Milan-based company may ask for some debt payment deadlines to be extended, they said, asking not to be identified because the plans are confidential…

http://bloomberg.com