Prada How Can Organic Growth Return To The Right Track?

According to the world clothing shoes and hats net, Milan, Italy -- in recent years,

Sales and profitability were hit.

For a long time, Prada's handbag products have missed the entry-level price.

To attack the high-end price.

But Prada is not Chanel after all.

A relatively low price has long been written into Prada.

DNA, and very crucial, if the company wants to see organic growth back on track.

The market disconnect of Prada footwear products is also obvious.

Footwear has been one of the few positive companies in the company. Today, as managers underestimate the rise of sports shoes, brand shoe business has regressed.

Considering the trend of sports shoes is obvious, it is amazing.

There is also a match: as a whole, the brand's new sales volume is good, as part of the Prada portfolio has increased significantly, but the same store sales of evergreen products are falling sharply.

The strong positioning of advanced garments and the strong consumer response of new leather products support the idea that Miuccia Prada and its creative team are at the top of the game.

But sales of evergreen products also indicate that the marketing display of key strategic functions has not been seriously valued.

Without strong marketing capabilities, the risk of creative effort is being apportioned, energy diluted and resources wasted.

As a matter of fact, Prada seems to lack the most powerful businessman, with the brand creative director and his department in hand, rather than a new group of leader design.

Of course, even if you do the product right, you will have to sell the product in the end.

Prada also misread the market on this point.

Prada's retail network is undoubtedly of the highest quality, but the organic growth rate has not been speeded up. It is like forcing a suit that is too large and too expensive.

There is also the problem of digitalization.

As early as 2014, I asked Prada CEO Patrizio Bertelli why she was skeptical about e-commerce.

His answer is: "I do not doubt, but there are more important things to do, such as opening new stores."

Of course, he is not the only one who underestimates the digital business opportunities, but Bertelli has since made the 180 big turn.

Today, digital business has become a priority for Prada, though ambition is not too intense.

Chiara Tosato, managing director and chief digital officer, said her plan aims to achieve e-commerce in the fiscal year 2018, which accounts for only 5% of total sales (directly and wholesale business), significantly less than two times the market average of this ratio.

But digitization is only the latest example of Prada's need for clearer strategic thinking.

But there is good news.

In the first half of 2017, Prada's earnings report confirmed that the brand is improving the price mix, and the discount activity is being downgraded. This is undoubtedly positive and will enhance brand value in the medium term.

There is no doubt that Prada is still one of the most famous soft luxury brands in the world, but the real commitment of the brand has not yet been realized. In view of the serious seriousness of the fashion house in recent years, it is obvious that this company needs more than fine-tuning.

Luca Solca is the head of the luxury department of Exane BNP, Paris securities and banking department.

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