Cash-strapped Milan-based luxury goods group Prada has dismissed rumours it is considering another fire sale by selling off the Jil Sander fashion house to improve its troubled financial situation..

Only last week, Prada sold its 25.5 per cent stake in Fendi to French partner LVMH in a bid to lighten its debt burden, but a spokesman for the company said on Wednesday: "From what I understand, the rumours are absolutely not true."

Prada acquired the Sander two years ago during a spending spree that also saw it gain control of Helmut Lang and English shoemaker Church.

But the German fashion house's profits plummeted 98 per cent in the first six months of this year to $70,000, highlighting the difficulties Prada has been experiencing with the label.