Prada’s growth plans | BoF
on a roll
- Prada releases 2021 financial results on Monday and executives will speak with analysts
- In January, the company said sales rose 41% to $3.8 billion last year and 8% from 2019.
- Prada has pulled out of wholesale, which will help margins as sales climb
Prada only needs two or three years like the last to reach its goal of $5 billion in annual sales. The group, which also includes Miu Miu and Church’s, already released its 2021 revenue in January, two months ahead of schedule. It was a show of strength for a company on the rise. Sales are up from 2019 and Prada ranked third in the latest Lyst index of hottest fashion brands, its best showing yet. Sister brand Miu Miu has been making headlines non-stop for its now ubiquitous micro-mini skirts.
As with most major luxury brands, there’s a world of difference between what’s buzzing on catwalks and magazine covers and what’s driving sales. Miu Miu skirts are a staple on TikTok and sell out in stores, but it’s Prada handbags and pumps – sold in the brand’s stores at full price – that will take the company to $5 billion (the leather goods and footwear accounted for nearly three-quarters of Prada group sales in the first half of 2021, although the share of clothing is on the rise). So will expansion into categories such as jewelry and beauty, where a longstanding partnership with L’Oréal is finally coming to fruition, starting with the launch of men’s fragrance Luna Rossa Ocean last fall. .
The essential : Prada could use Monday’s call with analysts to outline its pricing strategy for 2022. The brand has limited its discounts in recent years, but has yet to join Chanel, Louis Vuitton and other rivals in aggressively increasing prices of leather goods.
The geopolitics of fast fashion
- Hennes & Mauritz, owner of H&M, and Inditex, parent of Zara, publish their quarterly results this week
- H&M’s sales in China have fallen sharply since a boycott last year after the company raised concerns about Uyghur forced labor
- Both companies temporarily pulled out of Russia earlier this month, closing hundreds of stores
Fast fashion brands try to be everywhere and everything for everyone, which usually means staying out of politics. It has become more difficult in recent years. Last spring, H&M was one of several Western clothing brands targeted by a boycott in China after raising concerns about the use of forced Uyghur labor in the cotton harvest of the Xinjiang region. In the fourth quarter, sales were still down about 40% in the country. In Russia, H&M and rival Zara joined other brands in closing stores and halting e-commerce after the country invaded Ukraine. The experience of Uniqlo-parent Fast Retailing last week silenced any doubts about whether it was still possible to stay away from politics. The company’s chief executive initially argued that the brand’s Russian stores should remain open, calling the clothes a “necessity”. Fast Retailing was quickly forced to back down in the face of global consumer outrage.
The essential: Russia and China account for about 9% of H&M’s combined sales, and Russia contributed about 8.5% of Inditex’s EBIT. Both companies treat their geopolitical problems as temporary, but at some point they may have to look elsewhere to make up for lost revenue.
- Alexander McQueen unveils his Fall/Winter 2022 collection in New York on March 15
- Jacquemus, Willy Chavarria and Ralph Lauren also chose to show their calendar
- Most of the big luxury brands have started showing up again in Paris and Milan as concerns over the pandemic fade
Despite the return of brands like Gucci and Bottega Veneta to the program in the last fashion month, not all brands have returned to the fold. Each recalcitrant has their own motivations. Jacquemus was never married to the schedule to begin with, and lush venues are now a brand staple — last week he used an Oahu beach as his catwalk. Ralph Lauren, like Marc Jacobs, doesn’t need New York Fashion Week to grab attention. Willy Chavarria, when asked about the timing of his next show, told BoF: “It’s not as important for us to show during the fashion week calendar. For us, it’s about when we think the collection will have the most impact. This timing has to do with many factors, but at its core it’s a feeling, an instinct, a craving. This leaves McQueen. Unlike his fellow stablemates at Kering, McQueen continues its approach to the pandemic era with a show in London last fall and now in New York.
The essential: A trip to the United States makes business sense for McQueen: the brand is on fire and North America, as well as Asia, is driving sales growth, the chief financial officer of McQueen said last month. Kering, Jean-Marc Duplaix.
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