Prada’s Growth Plans
By Brian Baskin
This week, everyone will be talking about Prada’s growth plans, updates on Russia, China and other geopolitical hotspots from H&M and Inditex, plus Alexander McQueen’s show in New York.
Prada Climbs the Ranks
* Prada reports financial results for 2021 on Monday, and executives will speak to analysts
* In January, the company said sales rose 41 percent to $3.8 billion last year, and were up 8 percent from 2019
* Prada has pulled back from wholesale, which will help margins as sales climb
Prada needs only two or three years like the last one to reach its goal of $5 billion in annual sales. The group, which also includes Miu Miu and Church’s, already released its 2021 sales in January, two months earlier than scheduled. It was a show of strength for a company that is riding high. Sales are up from 2019, and Prada ranked third in Lyst’s most recent index of fashion’s hottest brands, its best showing to date. Sister label Miu Miu has been in the news nonstop for its now-ubiquitous micro-mini skirts.
As with most big luxury brands, there’s a world of difference between what’s driving the hype on the runway and magazine covers and what’s driving sales. Miu Miu skirts are impossible to avoid on TikTok and are selling out in stores, but it’s Prada handbags and pumps – sold in brand-owned stores at full price – that will get the company to $5 billion (leather goods and footwear made up nearly three-quarters of Prada Group’s sales in the first half of 2021, though apparel’s share is rising). So will expansion in categories such as jewellery and beauty, where a long-gestating partnership with L’Oréal is finally materialising, starting with the launch of men’s fragrance Luna Rossa Ocean last fall.
The Bottom Line: Prada could use Monday’s call with analysts to outline its pricing strategy for 2022. The brand has reined in discounting in recent years, but has yet to join Chanel, Louis Vuitton and other rivals in aggressively raising prices on leather goods.