Just months after clothier Tommy Hilfiger Corp. pulled the plug on its gargantuan custom-built Rodeo Drive flagship store, Prada is preparing to begin construction of a similarly massive flagship on the famous Beverly Hills shopping street.

The ultra chic Italian company expects to begin building its three-story flagship at 339 N. Rodeo Drive this summer. It’s slated to open in a year and will incorporate the adjacent Prada Men’s store. Prada officials declined to disclose how much the company plans to spend on the project.

Designed by Dutch architect Rem Koolhaas, the store is expected to be impressive, even by Rodeo standards. But industry observers are wondering if investing millions in a fashionable emporium on one of the world’s most famous shopping streets is a wise business decision, given the precarious retail climate and the abysmal performance of the behemoth Tommy Hilfiger flagship up the block that closed earlier this year.

“Prada is a great brand, and Rodeo is a very prestigious area to open up a really showcase store,” said Tony Cherbak, retail expert with Deloitte & Touche. “But, that being said, these are trying economic times and it will be a challenge for the company to be successful (there).”

A Prada spokeswoman declined to comment on the economic feasibility of opening such a lavish new store on Rodeo.

The 14,000-square-foot store has been designed to have a front wall made of aircraft-grade aluminum, which will drop into a subterranean pocket, opening the trendy store to the street.

Establishing a major presence on the street, analysts said, is a good way to market the label. But it may be tough to make the store a profitable venture. “The success of this monument (on Rodeo Drive) depends on the economic times. And it depends on the line. Prada has been a hot line for the last few years, but it could fade, depending on who’s designing it,” said one New York retail analyst.

Furthermore, Prada’s net income in 2000 fell 43 percent from the previous year to $82.7 million (94 million euros).

In addition, the company’s major expansion has left it saddled with a heavy debt load, which was to have been alleviated by an initial public offering this spring. But now the company says it won’t go public on the Milan stock market until this summer, due to weak market conditions.

But none of that is stopping Prada from proceeding with its massive project on Rodeo, or its three other major flagships the former Guggenheim SoHo location in lower Manhattan, a nine-story tower in San Francisco and a 21,000-square-foot store in Tokyo.

Tommy Hilfiger boldly launched the same kinds of expansion around the world a few years ago, and then started backpedaling last year. Early this year, Hilfiger decided that the Third Street Promenade in Santa Monica would be a better location for its products.

“I’m not sure the demographics of Tommy Hilfiger was the Rodeo Drive customer,” said Aubie Goldenberg, a retail expert with Ernst & Young.