Can Prada Find A New Way In A Period Of Profound Change?

The luxury market is getting warmer.

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Since its establishment, Prada has long been known all over the world, and its products often appear in film and television works.

However, since 2014, Prada's net profit has continued to decline, and with the decline of its performance, the company's share price has dropped from the highest HK $81.89 per share (pre ex rights processing) to the latest HK $24.05 per share, which is only 30% of the highest price.

Recently, the Prada group released the 6 month interim results announcement as of July 31st. During the period, the group's sales decreased by 5.5% compared with the previous year.

In addition to sales growth, the Middle East market, Japanese market, European market and the Americas market have declined to varying degrees.

In September 11th, Prada's share price fell 13.95%, hitting a new low in the year.

According to the world clothing and shoe net, Prada has vowed to carry out a comprehensive pformation in 2016, but now it is lagging behind, and the time and investment needed for the pformation are more than they expected.

The Lyons report is very disappointing to the Prada group, which expects Italian company to have a digit growth in the first half of the year. Unexpectedly, Prada's sales fell 5.7% to 1 billion 442 million 600 thousand euros in the first half of the year, far below the bank's expectations.

Lyon also said that Prada group's first half operating profit fell 240 basis points over the same period last year, believing that the second half will be more challenging. Although the near performance in the US and Europe seems encouraging, it still can not make the overall performance recover, so Prada rating will be further reduced to "sell" from the "losing market".

The founder of No Agency, a fashion industry research and consulting firm, commented on the current market reaction of Prada group, saying that the market reaction was completely unexpected. The Italy group's performance lost its main competitor in the short term. It is expected that its profits will continue to be under pressure in the second half of the year, along with the increase of its wholesale channel business ratio and expansion of its channels in terms of e-commerce.

At the same time, he said that when the market was warm, it would be so bad that if the market restarted, Prada would be more difficult to adapt. He expected that the company would face a crisis of "no change, death, change and risk."

However, Prada has confidence in the future development of the group.

Prada has set up a new team to develop the digital strategy.

In 2017, the group focused on developing the "Prada365" digital marketing strategy put forward at the end of last year, changing its traditional advertising strategy and constructing a continuous stream of visual data, that is, a full dimensional platform containing media from the print media to the Internet and social media.

In the face of extremely depressed handbag business, Prada Group Co chief executive Patrizio Bertelli still dares to claim that the brand's product is no problem, and says the group product design is "very powerful".

According to the world clothing and shoe net, in May last year, Prada group announced the start of a non family management restructuring aimed at reintroducing new blood to the management of the group.

Prada group chief executive Patrizio Bertelli also pointed out in the interview that she will accept all changes. Fashion is derived from continuous innovation and opportunities. If a certain rule is established, it is wrong. There is no right or wrong in fashion. It is important for the brand to find suitable development mode.

Prada also openly stated that they did see some positive improvements, though not as many as the group imagined.

The new product line (such as Etiquette, cahier, Paradigm, Ribbon) has received good reviews and has been welcomed by the younger generation.

At the same time, the group's digital pformation (sales, shopping experience and advertising) has not yet been fully implemented, but the growth of e-commerce sales in some areas has indeed reached double digits. For example, Europe and the United States, the 17 fiscal year will expand to the major Asian markets, Australia and Russia, while the 18 fiscal year will cover the Middle East, Latin America and other Asian markets.

Alessandra Cozzani, who joined the group as chief financial officer in 2016, said that the group has strong cash flow and capital adequacy, and is undergoing profound changes at this stage.

She also pointed out that the electric business facing the Asian market will be launched by the end of this year, covering the whole world in 2018.

More interesting reports, please pay attention to the world clothing shoes and hats net.