According to Prada CEO Patrizio Bertelli, the luxury sector is expected to see a strong recovery and growth post-Covid, with a forecasted 30% increase by 2025. Established luxury brands are anticipated to lead this growth, while smaller businesses may struggle to keep up. Bertelli highlighted that many small and medium-sized enterprises (SMEs) have valuable capabilities and products but face challenges due to the high costs of digital tools and e-commerce. Smaller businesses will likely rely on larger brands for support in establishing their identity.
The pandemic has accelerated a natural selection process, putting numerous small companies, especially those contributing to Italy’s fashion heritage, at risk. Bertelli emphasized the importance of preserving successful labels and making substantial investments. Prada has taken steps to support these businesses by acquiring minority stakes in them, recognizing their craftsmanship and expertise. This enables them to develop their businesses within a larger corporate framework.
Bertelli also emphasized the significance of creating an identity within the workplace to engage employees with brands. The relationship between employers and employees has evolved toward involvement and collaboration rather than a traditional boss/employee dynamic.
To overcome the economic crisis, Bertelli believes that a collective effort is necessary. Recognition of the value of “made-in-Italy” products has increased in recent years, and the Italian government has shown interest in supporting the fashion industry. However, Bertelli suggests that support should primarily focus on labor dynamics, with the industrial aspect left to the private sector.
Regarding Covid-prevention measures, Prada’s employee representatives have agreed to allow access to factories for vaccinated or tested workers. The company covers the cost of weekly tests. While objections related to individual freedom have been raised, Bertelli emphasized the importance of setting aside individualistic considerations in emergency situations and showing respect for others.
Looking ahead, Bertelli predicts an increase in demand for quality materials and high-end products over the next 10 to 20 years. Both established luxury brands and smaller players are expected to benefit from this shift in consumer preferences. China is predicted to play a crucial role, driven by the young population’s extensive use of new technology. Bertelli also anticipates that cash will no longer be used even in the poorest markets within three to four years, as mobile payments become the norm.
Bertelli attributes Prada’s success to the partnership between himself and his wife, Miuccia, who represents 60% of the project. While the future leadership of the group will depend on their son Lorenzo, Bertelli believes he is already proving to be critical and demanding, indicating his readiness for the role.
Prada has significantly expanded its monobrand store network and now comprises 90% of their retail network. However, Bertelli recognizes the value of maintaining relationships with independent retailers to receive valuable feedback from outside the group.
In conclusion, Bertelli expressed doubts about the possibility of creating a major Italian luxury group in the future due to widespread individualistic behavior. Instead, he suggests working towards aggregation rather than predominance to establish successful groups in Italy.
Useful links:
– Business of Fashion
– Revista Venus
