Italian fashion house Prada, which is preparing for an initial public offering of about $2 billion in Hong Kong, said its net profit more than doubled in 2010 and it expects further gains in the current half year.

The Milan-based company expects to post a profit of at least 150.7 million euros ($215.3 million) for the six months to July, according to a filing with the Hong Kong stock exchange on Friday.

It saw its net income more than doubling to 253.6 million euros by January 2011 from the year earlier, the filing showed.

Prada plans to use most of the proceeds from its Hong Kong initial public offering on expansion and renovation of its stores over the next 18 months as the company bets on increasing demand for luxury products in China and the rest of Asia.

The company plans to add a net total of about 80 directly operated stores by the end of January 2012, most of them in the Asia Pacific region, where it sees substantial potential for growth, Prada said in the filing. Prada, known for its handbags and Miu Miu dresses, plans to sell 423.3 million shares, equivalent to 16.5 percent of its enlarged capital, according to a term sheet of the deal seen by Reuters on Wednesday. The IPO has been valued at around $2 billion.

About 14 percent of the shares will be sold in a primary offering with proceeds going to Prada, while 86 percent will come in a secondary offering from shareholders Prada Holding BV and Intesa Sanpaolo . The IPO could be raised by 63.5 million shares, all from Prada Holding BV, if underwriters exercise a greenshoe option to meet demand for the stock. An indicative price range is expected to be set later on Friday.

The fashion house, run by Patrizio Bertelli and designer Miuccia Prada, has about a third of its 326 directly operated stores in Asia-Pacific, its fastest-growing market. Consumption of luxury items in China, the world's second-largest economy, has surged at double-digit rates in recent years as a new class of consumers snapped up jewelry from Tiffany & Co , ties and scarves from Hermes and Louis Vuitton handbags. China will account for 20 percent of the global luxury market by 2015, with spending in the country nearly tripling to $27 billion by that year from around $10 billion in 2009, according to consulting firm McKinsey & Co. The offering is slated to be priced on June 17, with listing on the Hong Kong stock exchange set for June 24. Goldman Sachs , Credit Agricole's CLSA brokerage and Italian banks UniCredit SpA and Intesa Sanpaolo's Banca IMI unit , both on Prada's board, were picked as joint bookrunners and global coordinators of the IPO.

($1 = 0.700 euros)

(Reporting by Elzio Barreto and Stephen Aldred; Editing by Ken Wills and Lincoln Feast)

China