Italian luxury goods group Prada Holding NV on Wednesday shocked the city and fashion industry by postponing its initial public offering for a third time citing weakening market conditions.

The Milan-based company was due to embark on its IPO roadshow next week but said a slide in market conditions in the wake of the WorldCom scandal in the US meant it would delay the offering until markets improved.

Prada had planned to pay off some of its $962 million debt - a legacy of its spending spree of the 90s when it acquired upscale brands such as Jil Sander and Church's shoes - with the proceeds of the float.

"We do not feel current market conditions allow for a full valuation of the strong and continued growth of our labels and products," said co-chief executives Patrizio Bertelli and Miuccia Prada in a statement.

The company added that markets have "recently worsened more than was reasonably foreseeable when we decided to start the flotation process in April" and it would keep a close eye on the situation "and hope that market conditions will evolve positively for Prada's IPO".

Prada had originally planned to float last spring but delayed that launch until later in the year when it was then hit by the economic fall-out of the September 11 terrorist attacks on the US.