Prada : What Went Wrong?

[RaisinBoy]

I’ve heard that he might be doing something at Miu Miu...

This is what I expressed in the other thread. I don't think Raf is coming to replace Miuccia – come on, she is Prada. To me this looks more like a collaboration or getting control over Miu Miu or maybe Linea Rossa...

 

[GivenchyHomme]

Via WWD:

Rumors Swirl Around Raf Simons in Milan
Market sources say the designer could be headed to Prada, in particular to Miu Miu.
Luisa Zargani

RAF’S ENCORE IN MILAN?: There are some rumors that just won’t go away and the most insistent in Milan is the one that sees Raf Simons on his way to Prada Group. Market sources suggest the Belgian designer could be headed to Miu Miu as they say that Prada’s sister label has moved its design and communication office to Milan from Paris. The sources added that Simons has been searching for an apartment in the Italian city, which may have led to the tie-up speculations.

Prada Group had no comment on the rumors.

To be sure, Simons is a longtime friend of Miuccia Prada’s and has attended several of her fashion shows. Sources also contend that perhaps Simons could be in talks to collaborate with the Italian designer in some form or work on capsule collections, given her full-on engagement at both brands.

In November, during an event organized by Flanders DC, at the fourth edition of Fashion Talks in Antwerp, Simons touted the importance of staying independent and reflected on his frustration at his previous positions at Jil Sander and Dior,although he did not mention Calvin Klein, a post he left as chief creative officer in December 2018. He was also uncomfortable with the pressure of constantly growing the company as the only measure of success. Prada is a publicly listed company, which could pose a hurdle for Simons in this sense.

 

[dodencebt]

Ooh, so the rumor is for Miu Miu. Then I can actually see Miuccia leaving the sister brand and solely focusing on Prada.

 

[perfect blue]

I would just to see Raf stay somewhere for more than 5 years this time.

 

[Lola701]

Raf at MiuMiu? The hypebeasts are happy, he will be able to wear Prada for free and Katie Grand is out of the equation!

 

[Melancholybaby]

Raf at MiuMiu? The hypebeasts are happy, he will be able to wear Prada for free and Katie Grand is out of the equation!

Only to be replaced by Olivier Rizzo.

Raf's own brand is suffering and he's taking up another one? Hasn't he learnt anything from the CK fiasco?

 

[Lola701]

Only to be replaced by Olivier Rizzo.

Raf's own brand is suffering and he's taking up another one? Hasn't he learnt anything from the CK fiasco?

Rizzo did a great Job with MiuMiu...

Is his own brand really struggling? I’ve always felt like his business model worked for him...Even if the hype around him is not as high as it was. I’m actually surprised to see a lot his CK on Yoox or TheOutnet. Even at 60/70% off it doesn’t go away fast.

Maybe Prada might save him. I liked his menswear for CK but i still feel like the hype around him has never been effective commercially. So this might be his last chance....

 

[style_expert]

There was a time when Miu Miu had menswear too, and it was pretty good. Maybe they want to re-introduce it with Raf at the helm for both womens and mens wear?
It’s pretty clear the Prada Group is beyond desperate at this point. Honestly, I don’t believe hiring Raf Simons in any capacity would make that much of a difference. The novelty has worn off and Raf has had too many (commercial) failures to really make it something new and fresh.

 

[GivenchyHomme]

Raf took on Calvin Klein as a blank slate which is shocking because his aesthetic was very similar to Costa. We were all expecting that kind of Calvin Klein. How do I put this nicely?.... Our expectations were not met. Miu Miu is a horse of another color. It's sophisticated at its core and far more complex than Calvin Klein ever was. If he could take it in the same direction as Jil Sander and twist it with Miu Miu then he will surely have a hit. Miu Miu is significantly smaller than Dior and bigger than Calvin Klein, so it will be a good middle ground. It's enough work to keep him busy, but not so much as to have him spread as thin as he was at Dior. Four collections per year (2-RTW, 1 Resort, 1 Pre-Fall Lookbook) is much better than six full scale productions which was absolutely absurd. I don't blame him for leaving Dior. That job was a major commitment. Miu Miu has been neglected for years so maybe one dedicated designer will bring it back to life. As long as Miuccia keeps doing Prada, I'll be more than happy.

 

[dodencebt]

"For instance, Adidas x Prada’s collection of white bags and sneakers emblazoned with both brands’ logos helped the German sportswear label increase its overall earned media value (a metric that estimates the value of publicity, engagement and mentions online) to $26.9 million in November 2019, up 10 percent from the month prior, according to analytics firm Tribe Dynamics. However, Prada’s declined by 1 percent to $13.8 million.

It makes sense that Adidas benefited from the collaboration, which included a pricier collectable version of its classic Superstar sneaker. But Prada failed to capture the imagination of either its regular consumer base or new customers with what was ostensibly a limited take on an established sportswear staple. While Highsnobiety’s Chris Danforth said he found the combination of quality and timelessness “pretty appealing,” many on Instagram panned the two-piece collection for being “lazy” and lacking in thoughtful design."
businessoffashion.com

 

[RaisinBoy]

There is another article on BOF behind the paywall about Prada being possibly for sale.

 

[Lola701]

^^
The value of Prada might be pretty insane...It might be close to or bigger than Tiffany.

Prada, from a business point of view is not exploited to it full potential but with the L’Oreal deal and maybe the hiring of Raf for MiuMiu, it sends a signal of wanting to take things to the next level.

I don’t think that Prada will sell before trying to see if they can take things further on their own. And, let’s not forget that Prada is a group...

 

[tatouejeremie]

Does a Prada Sale Make Sense?

The Italian brand may no longer be a luxury leader, but it is still an attractive asset for prospective buyers.

By BoF Team January 31, 2020 17:58

After bubbling up for months, speculation mounted during the recent men's fashion month that the Italian luxury goods maker was exploring a sale to Kering, LVMH or even Richemont. Reports also spread that designer Raf Simons was set to join Prada Group SpA in some capacity.

The rumours followed a small but notable change in the parent company's structure this past October, when it bought four key Prada brand stores in Milan that were previously owned by the Prada family and operated through franchise agreements. Any future acquirer would want these stores, especially its first location open since 1913. Was this consolidation a sign of something to come?

A representative for Prada denied a forthcoming sale and declined to comment on Simons’ potential arrival. Representatives for Kering and Richemont declined to comment. At its annual results presentation this week, LVMH Chairman and Chief Executive Bernard Arnault brushed off the rumours when asked.

Prada’s Chief Executive Patrizio Bertelli, who controls 80 percent of the business with partner and designer Miuccia Prada, has for years rebuffed any intentions to sell the company.

Even if all the recent Prada related speculation is just that, the luxury brand’s future may depend on plugging into one of the all-powerful luxury conglomerates.
Prada, the brand, is bigger than Prada, the business, making it an attractive asset for prospective buyers.

Prada, the brand, is bigger than Prada, the business, making it an attractive asset for prospective buyers. Prada’s logo may not have quite the same name recognition as the Louis Vuitton "LV," but the brand is one of the oldest and most respected Italian houses in luxury. Miuccia Prada’s men’s and women’s collections continue to earn praise from critics and creatives. And the company has potential to grow, as it is still much smaller than many of its heritage peers including Gucci and Louis Vuitton.

“It’s one of the biggest luxury brands in the world: If they make a phone call to Avenue Montaigne or to the headquarters of Kering, they will have an answer,” said Mario Ortelli, managing partner of luxury advisory firm Ortelli&Co. “But who decides the future are Miuccia Prada and Patrizio Bertelli.”
Indeed, the business is deeply personal to Prada and Bertelli, and they are not facing any external pressure to sell it. And with the share price down 35 percent over the last five years, the timing isn’t ideal now either.

But Prada has suffered from strategic missteps in recent years, and would benefit from the management muscle that a big conglomerate would bring.

Despite efforts to adapt to industry shifts in distribution and communications, Prada was too late to recognise these key changes, investing in additional stores when competitors started prioritising online sales.

Merchandising has also been a problem. Despite having the historical bona fides to lead the latest streetwear luxury wave — the 1990s hit Linea Rossa line established the movement then — the brand cut back on entry-level price point products just as competitors established themselves in the key sneaker and athleisure categories and courted Chinese shoppers.

By the time Prada relaunched its Linea Rossa line in 2018 and partnered with Adidas in 2019, the luxury streetwear trend was already well-trod territory for Louis Vuitton and Balenciaga.

Prada’s recent challenges first became painfully apparent in 2016, when revenues decreased 10.3 percent on constant exchange rates to €3.2 billion, down from €3.5 billion in 2014.

A turnaround plan is ongoing, with focus on moving more sales from wholesale to direct retail, reducing markdowns and enforcing a greater control over prices. In 2018, Prada started an invitation-only pop-up club series called Prada Mode, as part of an effort to extend the community of creatives around the brand.

But the financial results are still underwhelming. Revenue in the first half of 2019 was flat year-over-year for the group and for Prada the brand, which represents more than 80 percent of sales. Retail sales decreased after the brand stopped all promotions and discounts in January 2019, but full-price retail sales grew slightly. Handbag sales were flat. Meanwhile, the company closed 10 stores and opened 11, and is planning about 50 store renovations and relocation projects.

Prada’s wholesale revenue was more positive in the period, as it continues to work with multi-brand e-commerce players like MyTheresa and Net-a-Porter, partners only since 2016. But a wholesale rationalisation strategy kicked off in the second half of 2019, reducing the amount of product available via these retailers by 50 percent for the spring 2020 season, according to Bertelli’s remarks to analysts in August 2019.

Some analysts have recommended an organisational refresh, including new leadership, as well as new approaches in merchandising and branding.

But regardless of what headway Prada is able to make, operating independently in the luxury business is an increasingly uphill battle as the industry continues to consolidate under the umbrellas of LVMH, Kering and Richemont, which wield greater negotiating power with outside partners and have strong networks of executives and designers.

Even Moncler, with its double-digit, Genius project-fueled growth, has been the subject of sale rumours.
Surviving independently requires risk-taking, Ortelli said, and risks are harder to take when the competitors are so far ahead. “To take market share away from the other major brands like Gucci, Louis Vuitton and Saint Laurent is very difficult when, as in the last years, they are having a great momentum” he said.

With the support of LVMH or Kering as a parent company, however, Prada could accelerate its modernisation efforts, taking advantage of those companies’ more developed e-commerce capabilities and tapping into a network of trained luxury executives who would bring new leadership to the company. And it could benefit from less public exposure as it takes time to invest for long-term success.

What happens after Miuccia, whenever that may be?

All of these concerns are secondary to the main question looming over Prada: what happens after Miuccia, whenever that may be? The designer has been the creative force of the business since 1978 — its entire expansion into hit handbags, footwear and ready-to-wear. And historically, the transition at a namesake brand from the founding designer to successors is a turbulent one. Valentino Garavani’s first successor, Alessandra Facchinetti, butted heads with management and left after two seasons. In the years after Yves Saint Laurent’s death, the brand was challenged and ebbed and flowed under a series of different creative directors and chief executives.


“For [namesake] brands, the change of the founding designer is always the most complex phase, and it requires a long time to be realised successfully,” said Ortelli. “If you are an independent company you are in the spotlight. If you are part of a group you can more easily take time.”

Prada and Bertelli, now both in their 70s, have not publicly addressed succession plans and did not appear to have a strategy in place until their son Lorenzo Bertelli joined the company as head of digital communication in September 2018. His arrival signalled that the company may keep the business in the family moving forward, and he may be ambitious enough to lead a more effective turnaround independently.

“A brand like Prada has the size and the strength to survive independently,” said Ortelli. “It is a question of willingness.”

bof.com

 

[RaisinBoy]

Thanks for posting this!

About the "no markdowns" policy: Matches Fashion has just put a lot of SS19 and FW19 pieces from Prada on sale with up to 70% off.

 

[dodencebt]

A last minute Prada press conference has been announced for today.

 

[Benn98]

In a way, I find it interesting not that Prada is in such a dip, but that they don't know how to get out of it. Maybe the privilege of always being on top after all these years when so many brands had ups and downs is part of the problem. The Adidas deal, the jumbled marketing approach, the beauty range, and now Raf....I really doubt all of this is making the brand more attractive to shareholders or the end user.

 

[ivano]

Prada started to look ugly when they drop Meisel from the campaigns and they start with that 365 concept. I never like the Vanderperre ads, even if he is one of my favorite photographers. Same happen to VI in 2015/16. Those years were a break for fashion,and since then everything gets worse (Dior, hahaha).

 

[depordetioz]

There are rumors that Prada is selling to Kering. Opinions?

 

[RaisinBoy]

There are rumors that Prada is selling to Kering. Opinions?

These rumors have been around for quite some time now. I personally don't believe for a number of reasons:

• First, Prada itself is a group. There's MiuMiu, Church's, Car Shoes and even Marchesi. The transaction would be rather complicated
• Second, Miuccia and Patrizio are extremely proud. I bet they'd rather close than sell. I can't imagine anyone from the family working for Kering.
• Third, they wouldn't have hired Raf if they wanted to sell.

 

[brixandbailey]

First thing that i want to mention is relate to the stores.
The disconnect between what we sees on the runway and what end-up in the stores is HUGE!
What people are prasing about Prada are accomplishments made in the 80's and an aesthetic that was very 90's.

People are saying that Prada is an intellectual brand only because Miuccia herself is an intellectual but Prada is quite different. The clothes (when they are produced) are well made, daring and powerful. Their shoes are perfect.

Next: almost a decade without an It-Bag. The nylon bags looks very dated (apart from the backpacks) but they are everywhere in every Prada shops/cornersz. Their last It-Bag was the fringe bag from spring 2007. The inside bag was silly. I think it's a flop but their two new bags are good.

Then, as Creative said, they took themselves too seriously. I don't remember the last time i read a bad review of a Prada show because in the fashion world, when you don't like a Prada show, is that you don't understand it.
IMO 2012 was the last great year for Prada. Their resort, spring, fall and menswear collections in 2012 were perfect. Simply styled, not overtly intellectual or complicated, womanly and chic. The menswear was powerful and desirable.
Resort 2012 was and is still for me the epitome of the Prada style today.

For the final part, i will say that their brand strategy is weird. Prada is loved by many (including me) because it offers real fashion. Like it or not, even if something is wrong with them, they are still doing Fashion.
BUT, Prada is also a quite "absent" brand in today's world of social media. They don't have any "fashion-relevant" ambassador like Chanel for example, their spokespersons choices are weird. They are not doing events or engaging people with things related to the brand.
They have that foundation but it's intellectual and most of the people who are buying a brand like Prada are more interested in the history of the brand, the BTS of the collection than a museum.

Meisel is not a problem. They need a new stylist: Rizzo is talented but what he is doing add a confusion and can make us question the actual involvement of Miuccia.
They need to produce what they put on the runway. It's silly and almost annoying every season to not be able to buy the exact version of an outfit you saw on a runway just because they didn't produced it.

I've heard that Net A Porter will start to sell Prada clothes...I'm waiting.

We are also waiting patiently to see Prada clothing going onto Net A Porter....we wonder what exactly they will choose to carry?