PRADA, the Milan luxury goods house, is targeting profit growth of 23.5 per cent a year for the next five years as it squeezes efficiencies from its supply chain and puts its showcase stores to better use.

According to documents submitted to its banks, Prada is looking for an average increase of 3.2 per cent in sales annually, taking turnover to €1.51 billion (£1 billion) by 2010. The luxury goods chain hopes that it will be assisted by a greater emphasis on ready-to-wear and accessories at its Prada and Miu Miu brands.

Prada has moved to isolate its loss-making operations by setting up a company called Prada SpA, which excludes Jil Sander, Helmut Lang and Church’s, the British shoe brand in which Prada holds a minority stake.

The company said that its shareholders were assessing “non-binding offers for Jil Sander and Helmut Lang brands from various industrial partners and private equity funds”. The company was “not under pressure” to sell either brand, with Jil Sander to be relaunched under new design leadership. It said that the cost base of Helmut Lang had been frozen, along with the closures of its stores in New York and Milan, until the company reached a decision on whether to sell the brand or relaunch it.

Prada expects sales this year to increase 6.9 per cent to €1.29 billion, with profits at €51.7 million, compared with a loss last year of €61.96 million for the group including the Jil Sander and Helmut Lang brands. For the six months to July, Prada SpA reported earnings up 23.3 per cent to €97 million on a 5.6 per cent increase in sales to €659.2 million.

Times Recommends

• C&G axed - 1,660 jobs to be lost
• UK house prices rise 1.1% as buyers return
• Mixed reaction to US banks repaying bailouts