The power behind the throne

Yves Saint Laurent had Pierre Berge.

And so it is at Prada, where the efforts of chief executive Patrizio Bertelli have been instrumental in transforming a little-known family leathergoods business into the most influential and successful fashion force of the past decade.

Alice Rawsthorn, director of London’s Design Museum, calls Bertelli "the most cunning man in fashion". He’s also routinely identified as one of the industry’s most powerful, charismatic, ruthless and temperamental figures. With very good reason, Bertelli is both feared and admired.

Prada has earned the enviable reputation for being the high-end fashion and accessories brand most likely to furnish you with that obscure object of desire - the look or individual item you don’t know you want until you clap eyes on it. From those pricey backpacks and totes in industrial-strength black nylon (ubiquitous in fashion circles during the late 1980s and early 1990s) to the fur tippets and clumpy court shoes of her 1940s revival of the year before last, Miuccia Prada has snared a reputation as the designer most consistently likely to unleash fashion’s next big thing.

But Bertelli isn’t only this prescient tastemaker’s husband and the father of her two teenage sons. Nor is the 58-year old businessman’s involvement in the company that bears his wife’s family name limited to casting an eye over the bottom line. For Bertelli is a man of boundless energy and inordinate commercial flair, who in his own way is every bit as creative as his wife. For, while Miuccia Prada has developed a distinctive fashion look in her idiosyncratic clothing and accessory designs, Patrizio Bertelli has channelled his incredible business acumen into making this look the cornerstone of a e1.5bn (£1bn) fashion colossus.

They seem like opposites, these two: she, rather intellectual and intensely private. He, as brash as he is burly, and infamous for a truly terrifying temper. Legends abound about his hour-long rants. Expressions of fury have been known to include throwing merchandise through office windows, smashing mirrors, or dramatically ripping up sketches submitted by his studio staff. If you want to see some really frightened retail workers, just call into any Prada store the day they’re anticipating a visit from their chief executive.

Perhaps Miuccia is the thinker, and Patrizio the do-er and go-getter. She is a graduate in political science, rather than fashion or textile design. Bizarrely, she also trained as a mime artist, and was once a card-carrying and placard-waving Communist. Now, however, instead of Marxist dogma she routinely delivers seasonal ideals in beauty and luxury consistent with the faintly eccentric elegance that is very much her personal style.

By contrast, his appearance confounds normal expectations of how the CEO of a fashion powerhouse should look. Often a little rumpled, and weather-beaten like an old sea salt, his own image could not be further removed from that of Prada’s lean and highly refined menswear. At university in Bologna he studied engineering rather than accountancy or business management before setting up his own manufacturing business. In fact, he and his future wife met in 1978 when she harangued him at a trade fair for allegedly copying some of her bag designs. This was a tricky situation that he turned around. Having pointed out the fine quality of his factory’s ersatz versions, he soon had a deal to manufacture the real thing for Prada. And from that unlikely beginning stemmed one of the fashion world’s most unlikely, yet successful, unions.

In 1987 they became husband and wife. "Miuccia was such a first-rate worker and designer," Bertelli later quipped, "I knew it would be cheaper in the long run to marry her."

If Miuccia defines Prada, Patrizio drives it. Or, as Lawrence Steele, a former Prada design assistant, suggests: "All she cares about is that everything carrying her name should be beautiful and true to what the name stands for. But Mr Bertelli insists that every product has to be commercial. It’s that combination that makes Prada so successful."

And successful it most certainly is. Twenty years ago Prada didn’t even have a women’s clothing line, let alone menswear, beauty products or a fragrance. In fact, although Miuccia began working at Prada in 1970, it had taken her 12 years to get around to adding shoes to its ranges of leathergoods that had been staples of the family business established by her grandfather, Mario, in 1913.

His enterprise - a small store in the heart of Milan’s ravishing Galleria Vittorio Emanuele II - had certainly prospered. But in the years following the Second World War, Prada did not exploit the new appetite for all things Italian, and failed to mirror the huge expansion of other Italian names such as Gucci. Indeed, until the mid-1980s the total number of Prada boutiques came to just three - two in Milan plus an outpost in New York.

As recently as 1990, Prada’s turnover was as low as e40m (£27m). But throughout the later 1990s revenues would rocket ahead with annual increases of 35 to 40 per cent, as store buyers clamoured at the door of Prada’s sales offices in the hope of being allowed to carry a brand that would automatically buy their businesses credibility and kudos.

Mario Prada’s original Galleria store continues to trade today - a mecca for tourists and Milanese locals alike. Only it’s now just one of hundreds in the global network of eucalyptus green and orchid pink Prada boutiques that sprang up during the luxury shopping epidemic of the 1990s.

All are dwarfed by the scale and vanity of Prada’s most recent openings. Witness the massive Epicentre store in Tokyo designed in the shape of a giant glass raspberry by seminal Swiss architects Herzog & de Meuron or Prada’s new American flagships in New York and San Francisco, in which avant-garde Dutch architect Rem Koolhaas has elevated shopping to something bordering a conceptual experience.

It would be easy to argue that Bertelli’s ambition knows no bounds. This, after all, is the man who took his love of sailing to the extreme, investing more than e150m (£100m) to build and crew Prada’s yacht, the Luna Rossa, in pursuit of the America’s Cup. He’s also the man who eagerly joined the acquisition spree that gripped the luxury goods sector in the last months of the old century - aiming, it seems, to transform Prada from a successful and influential fashion house into a multi-brand corporate conglomerate that might one day rival the likes of Bernard Arnault’s mighty LVMH Champagne-to-haute-couture empire.

The business world woke up one morning in the summer of 1998 to the surprising news that Prada had amassed a 5 per cent stake in Gucci. Within a fortnight this had almost doubled to 9.5 per cent. Although Bertelli’s hopes of forging synergies with Gucci came to nothing, and Gucci subsequently found itself embroiled in a takeover bid from LVMH (bitterly contested, and eventually outmanoeuvred thanks to the support of Francois Pinault’s PPR group), Bertelli’s pincer move seemed to have paid off very nicely when Prada sold its stake to LVMH six months later and pocketed around e100m (£69m) in profit. So far, so good. Bertelli then embarked on an expansionist strategy that would see Prada assume control of Jil Sander, Helmut Lang, Azzedine Alaia, Genny, Church the shoemaker plus (in a joint venture with LVMH) Fendi. Bertelli promised that Prada would go public. But the IPO (Initial Public Offering) never happened, and Prada found itself saddled with a e1bn (£690m) debt mountain.

Analysts believed each of the brands annexed by Bertelli could and would benefit from synergies and manufacturing economies achievable under the Prada umbrella. Most seemed a very good fit. Sander and Lang shared something of the minimalist aesthetic that had characterised Miuccia Prada’s work during much of the 1990s, while Genny’s superbly equipped, but under-utilised, garment factories greatly enhanced the enlarged group’s production capacity.

Bertelli planned to pump money and expertise into each of his acquisitions, promising to deliver improved performances from 2001 onwards. Typically, his strategy encompassed buying back franchises and licenses (Bertelli’s tight grip on production and distribution has proved key to Prada’s success), opening new boutiques and developing strong accessories lines - bags being Prada’s area of particular expertise, and still, today, its best performing sector.

But some of the designers who had so eagerly traded their independence for the Prada mullah had not foreseen how deeply and directly Bertelli would become involved in the day-to-day running of their businesses. The man whom Fortune magazine once labelled "hyper-controlling" was invading their personal space.

Just five months after Bertelli inked his deal with Jil Sander, the iconic designer walked out. The word was that, having built up her fashion house from scratch, and having answered only to herself, Sander found the requirement to answer to someone else intolerable. She no longer felt in control of her own destiny. With a characteristic shrug of his shoulders, Bertelli countered: "The problem with Mrs Sander is that she made the mistake of selling her company."

Although Bertelli was enraged by the suggestion that he’d fired her, he made it perfectly clear that the Jil Sander business would do very nicely, thank you, without Jil Sander. He was reported in WWD, the fashion industry’s journal of record, as having said: "The individual fashion designer is less important than the company."

Brave words that may have tempted fate. Milan Vukmirovic, the designer chosen to fill the void left by Sander, struggled to secure critical approval, and his work certainly disappointed Sander’s loyal and devoted customer base. Instead of bolstering group performance, adding prestige and a healthy bottom-line contribution, the Jil Sander business quickly became a loss-making thorn in Bertelli’s side.

The fashion world heaved a collective sigh of relief when they heard Sander and Bertelli had patched up their differences. The rapprochement was short-lived. Sander returned to work in 2003 and walked out again a year later - at odds, it seems, with Bertelli’s strategy for returning her fashion house to profitability. This whole sorry saga could be written off as an unfortunate clash of two strong personalities. Except, Bertelli’s relationship with Helmut Lang has also collapsed. Three months ago, he too walked out.

Although Lang never disclosed financial information about his business, it’s generally believed that when he sold the controlling stake to Prada his turnover was approaching the e100m (£69m) mark. By last year it had collapsed to a third of this figure. Another loss-making thorn in Bertelli’s side - and another disaffected designer at odds, it seems, with Bertelli’s strategy for returning an expensively acquired yet failing subsidiary to profitability.

The expanded Prada group was ill-equipped to cope with the negative impact of the 9/11 terrorist attacks. While Bertelli had certainly proved highly effective in developing Prada’s core business during the 1990s, analysts questioned whether he had the skills and temperament required to address the greater (and different) pressures of running a conglomerate of brands in a very difficult trading climate. And the jury is still out on that, given Bertelli’s expansionist strategy has so clearly failed to produce a positive impact on Prada’s bottom line.

Prada’s core labels (Prada, its youthful Miu Miu line, and Prada Sport) still generate the dominant share of the group’s total business. This leaves a huge question-mark over the wisdom of Bertelli’s decision to expand beyond this focus.

The company’s long-promised, but repeatedly postponed, IPO still hasn’t materialised (two-thirds of the entire Prada business remains in the personal ownership of Patrizio Bertelli and Miuccia Prada). Although Prada’s debt mountain has been reduced through a string of property deals, including sale and lease-back agreements or asset transfers to joint ventures, rumours abound that Bertelli will now choose to retrench - quite possibly returning the Sander and Lang businesses to their founders. Prada’s stake in Fendi has long since been surrendered to LVMH; Church, too, has been dropped from the Prada portfolio.

Although Prada remains a true fashion powerhouse, enjoying sustained critical acclaim and ever greater commercial success, Bertelli’s expansionist dream appears in the same sorry state as his beautiful Prada-sponsored yacht, the Luna Rossa, when it limped into harbour with a broken mast during an America’s Cup qualifier back in 2000.

Perhaps that was an omen.