Prada : What Went Wrong?

[Frederic01]

This is the kind of low-quality junk that Prada is currently selling in the store. I will never understand why they would prefer to sell this kind of image-destroying commercial cr*p instead of keeping the runway collection prices reasonable and focusing on selling and promoting that? It's the most bizarre strategy. These days in a Prada store you see more of this than anything that Miuccia has designed herself. Sincerely, what is the point? It looks so CHEAP. And they want to increase the prices to keep the image perception of the brand as "ultra luxe", but also fill out the stores with this kind of junk? Seems very contradictory and self-sabotaging to me.


FROU FROU MODE

 

[JohannesL]

I think Prada wants to use the aura of its RTW to sell tons of those entry-level products like luxury brands selling fragrances and cosmetics, but selling cheap entry-level textile products is not the same as selling fragrances and cosmetics even the profit margin is high. In this case, it is more like a diffusion line fashion. If cashing in the brand legacy is the ultimate goal, I don't think the brand has a bottom line.

 

[Reggie63]

Prada just posted its FY21 results, and revenues went up by 39% from FY20, 4% from FY19. They're at 3.36B euro. COGS is now at an all time low, at 24%. However, given that they've increased prices more than those revenue increase percentage figures, we can assume that they're still moving a much lower volume compared to pre-pandemic levels.

During the investor call, the executive team said that they're on track on meeting the 5B euro target in 3-4 years. Since I don't see them moving volume at a significant and meaningful level any time soon, I think we're gonna see more intense price increases and production costing cutting from them in the coming years. Good luck LOL!

 

[Frederic01]

Prada just posted its FY21 results, and revenues went up by 39% from FY20, 4% from FY19. They're at 3.36B euro. COGS is now at an all time low, at 24%. However, given that they've increased prices more than those revenue increase percentage figures, we can assume that they're still moving a much lower volume compared to pre-pandemic levels.

During the investor call, the executive team said that they're on track on meeting the 5B euro target in 3-4 years. Since I don't see them moving volume at a significant and meaningful level any time soon, I think we're gonna see more intense price increases and production costing cutting from them in the coming years. Good luck LOL!

In their defence, in that period, especially the second half, is when Raf's first "real" collections arrived in store (Fall Winter). That season was very successful due to the prices still being acceptable and also the designs being quite strong. They also had the Holiday collection which was likewise very strong and desirable with its reference to 00's Prada.

This current Spring Summer season is a massive flop. First of all the menswear is really average and really expensive. A leather jacket for $8200USD, a very basic tailored jacket for $4000USD, and those printed towel-fabric hoodies for $2250USD. They must be delusional if they think they will sell those items en masse. The price of their RTW is ridiculous.

The womenswear was/is slightly more successful, but only those silk-satin skirts and the shoes. Everything else in that collection is also over-valued and not as desirable as they think.

I personally don't think they will be able to achieve that goal. Raf and Miuccia could be successful but a) they won't compromise on vision and b) the pricing is a major issue, as we have all discussed. Prada is losing a lot of clientele and fast over it. Hopefully they fix this issue for the next Spring Summer season, because the Autumn Winter 2022 is likewise ridiculously priced. Apart from that white-tank top and the shoes, I don't see what pieces they exactly intend to sell in the boutiques...

 

[Reggie63]

In their defence, in that period, especially the second half, is when Raf's first "real" collections arrived in store (Fall Winter). That season was very successful due to the prices still being acceptable and also the designs being quite strong. They also had the Holiday collection which was likewise very strong and desirable with its reference to 00's Prada.

This current Spring Summer season is a massive flop. First of all the menswear is really average and really expensive. A leather jacket for $8200USD, a very basic tailored jacket for $4000USD, and those printed towel-fabric hoodies for $2250USD. They must be delusional if they think they will sell those items en masse. The price of their RTW is ridiculous.

The womenswear was/is slightly more successful, but only those silk-satin skirts and the shoes. Everything else in that collection is also over-valued and not as desirable as they think.

I personally don't think they will be able to achieve that goal. Raf and Miuccia could be successful but a) they won't compromise on vision and b) the pricing is a major issue, as we have all discussed. Prada is losing a lot of clientele and fast over it. Hopefully they fix this issue for the next Spring Summer season, because the Autumn Winter 2022 is likewise ridiculously priced. Apart from that white-tank top and the shoes, I don't see what pieces they exactly intend to sell in the boutiques...

You're right that they did well in FW21 compared to SS21, but I think it's more down to stores opening more in the 2H21, rather than what Raf did (around a quarter of the stores were closed in 1H21, versus 2-3% of stores closed in 2H21). Prada does not break out sales done in Prada.com, and their wholesale business is so insignificant that we can just guess for now that most sales that happen for Prada happen in their stores. The numbers still show that top-line growth is done inorganically, through price increases, rather than moving more product volume. Prices were already high during this period, not just in SS22; the brand has been increasing prices since early 2020. Real organic growth, coupled with the price increases, would have shown at very least, a 60% revenue increase over FY19. That's why I still think their overall strategy is problematic, and that's why they are resorting to more pathetic social media engagement (they're so proud of the Prada bucket hat challenge LOOOOL!) and implemented the Kardashian "failsafe" that so many desperate brands seem to employ.

I agree with you that the current offering, the pricing levels and the quality of the clothes being sold (the pictures you showed were shocking!) present real problems for the brand. It's a very difficult proposition to sell in such a noisy market. But in my opinion, I think Miuccia has already compromised her vision for the brand. I don't think Miuccia would have agreed to get Raf on board if she weren't pressured by the shareholders/board to relinquish her singular vision. Second, honestly, Prada never would done all those silly Tiktok shenanigans and never would have courted Kardashians to be the muses for the brand - this kind of marketing is simply inconceivable in the Prada of yesteryear. I get that marketing is evolving, but Hermes, and sometimes other brands, manages to use it well while remaining tasteful. At this point, they will do anything to sell more, even if it destroys brand equity to their core clientele further.

Let's see what all this amounts to when 1H22 results come out in July.

 

[Lola701]

This is the kind of low-quality junk that Prada is currently selling in the store. I will never understand why they would prefer to sell this kind of image-destroying commercial cr*p instead of keeping the runway collection prices reasonable and focusing on selling and promoting that? It's the most bizarre strategy. These days in a Prada store you see more of this than anything that Miuccia has designed herself. Sincerely, what is the point? It looks so CHEAP. And they want to increase the prices to keep the image perception of the brand as "ultra luxe", but also fill out the stores with this kind of junk? Seems very contradictory and self-sabotaging to me.

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FROU FROU MODE

It’s ridiculous to see that they put an awful logo on the beautiful FW 2002 dress.

Prada is relying too much on it past. Not enough fresh or forward thinking items. The collections with Raf are archives pieces revisited and in stores they are releasing archives pieces with logos. Their it bags are re-issues of past designs…Everything at an awful price.

Releasing archives pieces is clever as it allows them to tap into the vintage craze. But having a brand looking like a throwback is not interesting.

Alaia had a similar strategy that worked imo, much better as Alaia in the 2010’s has moved on from what it was in the 80’s and 90’s.

 

[perhydrol]

Alaia had a similar strategy that worked imo, much better as Alaia in the 2010’s has moved on from what it was in the 80’s and 90’s.

I think Alaia worked way better because those pieces were timeless and at the same time, they were quintessentially Alaia. The same can't be said about Prada, even if they rely heavily on archival prints and silhouettes. The final outcome feels artificial, especially with massive logos everywhere. They went really far from making memorable yet smart pieces to producing a triangle bag which is basically a 3-D render of the logo. I don't think it's a sustainable strategy, but the same could be said about their hype about economic growth caused by price increases. At some point, the brand is going to be extremely damaged by the oversaturation of the triangle logo being everywhere and those price increases. Perhaps karma works there and it's the Jil Sander and Helmut Lang's ultimate revenge.

 

[helmutnotdead]

Perhaps karma works there and it's the Jil Sander and Helmut Lang's ultimate revenge.

I had an evil smile on my face after reading that. Thank you.

 

[Melancholybaby]

This is The Sun so take that as you will but just lol at this news

 

[dior_couture1245]

ROFL I HOPE IT'S TRUE! The insanity! Rita Ora...they keep trying to make her a thing and it will never work!

 

[helmutnotdead]

I AM SCREAMING.

 

[Frederic01]

It's quite random and low for a brand like Prada. I mean, why her? She is literally the polar opposite of what I associate with the aesthetic of Prada. I can see her for Versace or Roberto Cavalli or something, but Prada? Seriously?

I mean, isn't this a brand that is supposed to stand for a more cerebral and sophisticated and unexpected kind of chic? It makes sense when they have somebody like Pedro Almodovar as the face of the brand. Or Lea Seydoux. Or Daria Werbowy even. But Rita Ora? So cringey. And I am so sick of these brands choosing people solely based on their social media following and reach. It drives me crazy how inauthentic these celebrity and brand partnerships are.

I would rather see Miuccia herself as the "face of the brand" rather than Rita Ora. Now that would be something really unexpected and authentic and supremely chic.

 

[susseinmcswanny]

Flopa Ora... ? This brand is srs suicidal

 

[blueorchid]

I would kill to be a fly on the wall during the discussion to make Rita Ora their new spokeswoman.

 

[helmutnotdead]

I just love the fact that they’re so dumb and clueless about what they want. I mean, who the hell is Rita Ora? If you’re gonna make some ridiculous marketing move, at least do it big and call Britney Spears, b*tch.

 

[Cute]

 

[velvetandsilk]

I just love the fact that they’re so dumb and clueless about what they want. I mean, who the hell is Rita Ora? If you’re gonna make some ridiculous marketing move, at least do it big and call Britney Spears, b*tch.

but their too much greedy for real star hahahahaha

 

[Marc10]

I think people people are giving waaaaayyyy too much credit to "a source" of The Sun

 

[Melancholybaby]

I mean...it was reported by the DailyFail as well

 

[GivenchyHomme]

I don't care for Rita Ora, so whatever. There is however, another recent development that I do take issue with. I saw a few clips of The Kardashians and I spotted several Prada products being featured prominently. Is that really what it's come down to? Advertising in reality television? Absolutely pitiful.