Italian luxury group Prada has recently announced its plans to streamline its wholesale presence by decreasing the number of retailers it works with worldwide. This decision was prompted by the observation of “increasing complexity and fragmentation” within the group’s wholesale network. Prada, which is also the parent company to brands like Miu Miu, Car Shoe, and Church’s, aims to exert better control over pricing and limit random discounts by implementing this measure. The Chairman of the group, Carlo Mazzi, emphasized the importance of maintaining consistency in pricing policies across retail and digital channels.
This move is part of a larger strategy that Prada has been employing. After experiencing a decline for several years, the group’s sales saw a global growth of 6% in 2018, totaling €3.142 billion. The strong performance of its retail sector, which grew by 7%, was the primary driver of this growth. Although net income suffered a 17% decline due to significant investments made by the group amounting to €284 million, the objective was to reposition Prada in the high-end market and attract younger generations. It is projected that millennials will constitute half of the luxury consumers by 2025. To cater to this demographic, Prada is focusing on accelerating its supply chain, enhancing the appeal of its retail stores, and strengthening its omnichannel strategies. This includes a recent partnership with Adobe’s cloud service.
In the broader context of Prada’s new brand image and marketing strategy, the decision to reduce the number of retailers serves not only economic purposes but also aligns with the company’s goals. By having fewer retailers, Prada can exercise greater control over its distribution channels, ensuring a consistent and exclusive brand experience for consumers. By strengthening its omnichannel strategies and investing in its retail presence, Prada is positioning itself to meet the demands and preferences of younger luxury consumers.
Useful links:
1. Prada’s Digital Leadership Strategy (Vogue Business)
2. Prada Group’s Luxury Business Strategy (Business of Fashion)
