Luxury Brand Prada Is Listed On The Hongkong Stock Exchange Today.

Prada 2011 spring and summer new products

In June 24th,

The importance of the Chinese market for Prada can be seen from its prospectus.

Sales in Greater China account for 19% of the world's total.

By contrast, the growth rate of Prada in Italy is only 1%, while that in North America is only 0.8%.

Over the past three years, the annual growth rate of Prada sales in the Asia Pacific region is 51%. The prospect is unlimited, which is mainly driven by the Chinese market.

It's in Greater China.

As of January 31st this year, Prada net profit reached 251 million euros, but it was carrying 4 billion 86 million euros of debt. If it can be successfully listed in Hongkong and raise funds, it will have to repay its debts before it grows.

According to Hong Kong media, Prada has officially launched international sales in early June.

The issue price is between 36.5 and 48 yuan per share.

According to the sales documents, Prada will offer 423 million shares and 15% additional allotment rights. If the price is set at the upper limit, it will raise 23 billion yuan.

After experiencing 4 failures in the past 10 years, the third generation head and designer, Miuccia Prada and husband Patrizio Bertelli, decided to place the battlefield far away from Hongkong, Milan.

For today's choice of listing in Hongkong, Mr. Bertelli, President of Prada, explains that "in the past 3 years, there has been a great expansion of business in Asia. Last year, local sales increased by 63%, the most prosperous area." listing in Hongkong is also aimed at "closer to China's huge consumer market."

Prada has invited Lyons, Goldman Sachs, St Paul joint bank of Italy and Italy SpA (UniCredit SpA) and other financial circles with rich practical experience to help. Because of 4 failures, Prada has also set a deadline for its listing.

Reporters learned that, in mid April, some heavyweight consulting companies such as McKinsey and so on fought for many nights to prepare for Prada listing, and many domestic venture investments were also watching the Prada group's every move.

Selected Hongkong

From the financial system, Hongkong is an Asian financial center with mature and relatively loose supervision, such as no capital flow restrictions, a large number of tax avoidance and tax avoidance advantages, free currency circulation, and free pfer of securities.

Compared to the financial tsunami of 2008, New York appears to be stricter and more pparent listing rules. Hongkong is very attractive to issuers and investors.

In 2009, Hongkong's IPO financing amounted to US $31 billion 800 million for the whole world. Last year, it became the International Fund's paradise.

At the end of January 2011, Xia Jia Li, chairman of the HKEx, took Prada as a case to invest in enterprises and private equity funds. He said frankly, "the valuation of Listed Companies in Hong Kong stock exchange is higher than other market averages" (about 30% higher than that in Milan), hoping that more European boutique companies will be listed in Hong Kong.

In May, when the French perfume brand L'OCCITANE was listed in Hong Kong, the stock market has been sought after by the market. Compared with L'OCCITANE, Prada has a higher reputation in the Asian market, and the premium will also be higher in Hong Kong.

The Prada valuation given by foreign analysts is slightly different, but it is generally in the range of 5 billion -60 billion euros, and the Prada share price may also exceed the target price of 7 billion 500 million euros, thanks to the popularity of institutional investors.

That is to say, in addition to paying up to 4 billion 86 million euros of foreign debt left over from history, it can also surpass 3 billion 400 million euros to expand the scale of business in the world, especially in the Asian market.

According to Prada, the company plans to open 17 new stores in China in 2011 and 11 new stores in 2012.

In addition to the north, Prada will expand its market share in the two or three tier leading cities in the future.

As early as January this year, the HKEx formally accepted Italy as its fifteenth overseas jurisdiction area. Market participants believe that the move will open the door for Prada, which is widely listed in Hong Kong.

Brand value

Another leather luxury brand Salvatore Ferragamo has chosen to list on the Milan stock exchange in Italy.

It is said that the reason behind this is that the valuation of Hongkong may not necessarily have much premium. This comparison may be somewhat farfetched. Another investor pointed out that the real reason should be "Ferragamo has no confidence in the recognition of its brand in Asia without Prada".

The key to whether a luxury brand can be premium after listing is its brand value.

According to the report released by McKinsey consulting company in early March, the sales volume of luxury goods in China has reached 12 billion US dollars in 2010, and this figure may reach US $27 billion by 2015, when China will become the largest luxury consumer market in the world.

Prada has 104 direct outlets in the Asia Pacific region. From 2010 to 2011 January 31st, Prada net profit reached 251 million euros, with a growth rate of 150.4%.

Operating income reached 2 billion 50 million euros, an increase of 31.1% over last year.

In 2010, the growth of Prada63% came from Asia.

The total revenue in China increased by 75% over the same period last year, exceeding the average increase in Asia, and contributed 20% to the group's turnover.

Prada clearly noticed the potential of the Chinese market faster.

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Just as Prada wants to exert power in the Chinese market, its products are frequently complained, and now that Chinese consumers are gradually becoming luxury brands "ATM", who will guarantee the interests of consumers?

Who supervises luxury brands?

The source of frequent doubts about products

Lily Qim bought a Prada leather bag in Frankfurt, Germany in May 30th this year. After returning to China in June, she used a famous brand of leather brightening agent to wipe the surface of her bag. The unexpected thing was that the package of bright yellow sheep's cortex began to fade away after being wiped.

"I haven't used this bag yet."

Lily Qim told reporters, "this leather brightening agent I have been used to wipe all kinds of leather goods, including other brand name bags, there has never been any problem."

The reporter consulted the staff of Prada, and the other side said, "our bags are not to be cleaned with our own leather cleaning agent. We need to send them to a special leather bag maintenance center."

"A leather bag worth 1100 euros, leather bright cleaner gently wipe it will be serious discoloration, how can it be justified?"

Lily Qim angrily told reporters, "this explanation is rather far fetched."

The relevant person in charge of the leather brightening agent brand told reporters, "we have not seen the package in a specific situation, but personally, I have used more than ten years of this brand of leather brightening agent, and I have not encountered such a serious situation."

In fact, in Prada, disputes like quality problems have been common, especially about discoloration and attrition.

Earlier, the media broke the news, Zhejiang Ruian business and Consumer Protection Commission jointly launched the brand clothing quality sampling inspection, in the sampling of 73 batches of clothing, the pass rate is only 50%.

Among them, the unqualified products include Prada's first-rate luxury brand.

The commerce and industry department ordered the disqualified products to stop selling at the time.

"Domestic luxury goods are mostly domestic OEM. The quality is usually not necessarily better than that of a product.

This is definitely not directly proportional to the price. "

A luxury industry veteran practitioners told reporters.

Media has pointed out earlier that Prada 80% products are domestic OEM, Goldman Sachs has listed it as a product quality risk factor.

The reason is self-evident - Prada is obviously very optimistic about the Chinese market.

According to its prospectus, Prada has 8 direct outlets in China in January 2007, and has increased to 18 by January 2011. It is estimated that by January 2014, the number of outlets will increase to 30.

"China's sustained economic growth will help us further penetrate more Chinese cities."

In order to seize the share of emerging markets represented by Asia as soon as possible, Prada has recently accelerated the pace of opening stores in Asian markets.

According to reports, Prada has 319 directly operated stores in the last fiscal year, including the Prada super flagship store and 18 discount stores located in New York, Losangeles and Tokyo, and plans to open 80 Direct stores in the financial year January 31, 2012, of which about 25 will be located in the Asia Pacific region.

Strong growth performance

As early as October 2010, the media came to the news that Prada plans to go public in Hongkong. This is the fifth time in 10 years that it will be listed on the agenda. Prada's latest attempt was in 2008, when the global financial crisis made its listing plan come to naught.

According to the Prada prospectus, the listed business in Hongkong mainly includes leather goods, garments, shoes and glasses and perfume provided by Prada and Miu Miu, as well as Church 's and Car Shoe brand targeting small niche shoe market.

Prospectus also shows that from 2009 to 2011, the overall sales share of Prada in the Asia Pacific region has increased year by year, while in Europe and the United States it has been declining year after year.

To this end, the establishment of a direct network in the Asian market has become the investment focus of Prada in 2011.

At the beginning of 2009, the contribution rate of the Asia Pacific region was the lowest in the three regions of Europe and Asia, not even the contribution rate of Italy.

But only two years later, Asia Pacific accounted for 32% of the Prada sales in the Asia Pacific region, while China's performance was even more prominent, accounting for 19%, while Japan accounted for 11% of the total.

According to public information, Prada group now has Prada, Jil Sander, Church 's, Helmut Lang, Genny and Car Shoe and other prestigious international brands, and it also has the exclusive licensing rights of the brand.

Prada6 24 was listed on the HKEx.

As of the latest news from our correspondent, the latest news from Hong Kong media is that Prada expects to raise funds by 30% compared to the expected $2 billion, up to 2 billion 600 million US dollars, equivalent to HK $20 billion 300 million.

Burberry and LVMH have been left behind, with a market value of more than HK $100 billion.

This has nothing to do with the impressive sales performance of Prada last year.

According to the Prada prospectus, Prada operating income reached 2 billion 50 million euros in the 2010 fiscal year as of January 31st this year, and net profit rose 150%, up to 250 million euros.

Sales exceeded 2 billion euros, an increase of 31.1 percentage points over the same period last year.

From the market perspective, apart from the incentives for the recovery of European and American market economies, the driving force of strong demand in the Asian market is becoming an increasingly important factor.

Luxury brand "ATM"

"In 2010, the total sales volume of the global luxury goods industry was 172 billion euros, an overall growth of 12%, more than 170 billion euros in 2007 before the financial crisis."

A ltagam m a of Italy luxury goods association predicts that the global luxury market will grow to more than 214 billion euros by the end of 2014.

According to Goldman Sachs report, China's luxury consumption in 2010 was as high as 6 billion 500 million US dollars, the first global growth rate for three consecutive years.

According to a forecast issued by CLSA in France, by 2020, China will buy nearly 170 billion euros worth of luxury goods around the world, and 44% of the world's luxury goods will be bought by Chinese people, surpassing the United States as the world's largest luxury market.

Among them, the Asian market has been a huge engine for the growth of the luxury group in the past two years. Bain Consulting's China luxury market survey 2010 showed that luxury goods suppliers took 68 billion 400 million yuan from the Chinese Pocket last year.

In 2010, China's GDP grew by 10.3% last year, and has maintained two digit economic growth for many years.

The number of 1 billion yuan users increased from 24 in 2000 to 1363 in 2010, with an average annual increase of 50%. The average Chinese customer of luxury goods is 15 years younger than foreign customers.

With the rise of the upstart class, the middle class is growing and consumer demand is escalated. The luxury goods represented by Prada in China are growing continuously.

Luxury goods have also become consumer goods of the middle class from the exclusive consumer products that few elite owned in the past.

The increasing number of tourists and the new rich class have become the main driving force of profit growth.

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According to relevant research reports, the Asian market represented by the Chinese market has almost become a "cash machine" for luxury brands. The Chinese Academy of social sciences has recently published the 2011 Chinese and English version of the commercial blue book.

With the increase of middle and high-end consumer groups, China's luxury consumption power will be maintained.

Before 2015, China became the world's largest luxury market.

Huge market potential makes China a new battleground for many luxury brands to compete.

The battlefield has not stopped in the first tier cities, and the "Sunken" development strategy with two or three line cities as the new target has also been included in the development plan of the luxury industry.

Meanwhile, in June 15th, Yao Jian, spokesman of the Ministry of Commerce, said that China would further reduce import tariffs, including tariffs on some medium and high grade commodities.

The most direct result of the reduction in the import tax of luxury goods is the huge consumption of luxury goods in domestic demand, which will further stimulate the development of the domestic luxury goods market.

Luxury services need upgrading

In sharp contrast to the soaring sales performance of luxury goods, luxury goods in domestic service are mediocre.

Nowadays, the major luxury brands have entered the domestic market. In the future competitive strategy, excellent quality and service will become a breakthrough to enhance the competitiveness of the brand.

However, nowadays, the quality of luxury goods has been repeatedly tortured, and after-sales service is worrying.

Insiders say that how to embody the rights and interests of consumers is becoming a matter of deep consideration.

In the eyes of experts, many consumers regard luxury goods as "absolutely perfect quality" because of the high price of luxury goods.

However, the quality problem was discovered shortly after purchase. In the process of bargaining with merchants, it often takes a lot of time and energy, and the cost of safeguarding rights is too high. In the end, it is often ignored. More consumers, when facing the international luxury brand, are reluctant to investigate.

"The product itself is still important, but today's consumers have begun to focus on" experience ", the courtesy they enjoy in the shopping process, and the after-sale services they receive.

The director of a luxury brand store told the times weekly reporter.

Apart from such complaints, the after-sale service of domestic luxury goods is also disappointing.

In the country, the brand status of luxury goods and its inconsistent services will ultimately restrict its development.

Nowadays, even after being ranked the first tier brand Prada, the after sales service has yet to be improved.

Relevant data show that since June 2010, 65% of the total consumption of luxury goods in Europe belongs to the Chinese.

The increasingly mature Chinese consumers want to get the after-sale service in China, such as the European and American markets, and even the after-sales service of products purchased overseas.

Therefore, it is particularly important to establish after-sales service facilities in the Chinese market and improve service quality accordingly, providing products for Chinese consumers to buy products not only limited to domestic products.

In the "2010 luxury market research" provided by Bain consulting, it is suggested that building and improving CRM system, managing Chinese customers worldwide is an effective way to deal with the increasingly mature Chinese consumer groups, and providing a globally consistent excellent customer experience is also a sign of the increasingly mature luxury services.

The listing of Prada has led to a rise in the price of luxury goods such as Hongkong's famous brand bags. Among them, CHANEL and Dior, which are sought after by the Mainlanders, have gained nearly 20%.

There are people in the market who want to buy luxury goods rather than buy them, and the more expensive they buy later.

CHANEL rose the biggest

In the face of high inflation and the weakness of the Hong Kong dollar, CHANEL increased its price in May 1st.

A spokesman for the company said that the price adjustment of its 7 classic diamond grain handbags was made by the fluctuation of exchange rate and the price of premium leather.

Yesterday, the LV and CHANEL brand stores in Guangdong Road, Hongkong, were mainly Mandarin buyers.

There are individual buyers asking about the price increase, the shop assistants basically do not answer.

Although the CHANEL classic rhombohedral handbag sells to HK $35 thousand and 900, mainland buyers are still bold enough to buy it.

Dior's most popular classic Lady Dior is also out of stock in the price surge. The clerk told Nandu reporters: "in May, the price of the whole line was adjusted once, and the lady Dior increased by roughly 6000 yuan, and the selling price is now 27 thousand.

Many customers know that they want to adjust their prices and come back in advance. "

There are second-hand brand shop staff also revealed that in recent years, many famous brand bags increased, including the largest increase in CHANEL, the most popular 25CM classic rhombic handbag as an example, from HK $29 thousand and 100 to HK $35 thousand and 900, an increase of 23%; and LV's Speedy handbag, a few months ago, the special shop price from HK $5500 to HK $5800, or more than 5%.

Mainland customers: whether to buy or to buy

Despite rising prices, mainland buyers did not let go.

Miss Xu from Zhejiang went to Hong Kong to help her friends buy bags.

She said, "these brands are going to raise prices every time they are released. They are actually promoting our consumption.

When we see that we can't see or fall, we will lose a lot if we don't buy it. "

"Don't look at the long queue. We are all staring at the selected style. We have found a direct purchase."

Yesterday, Miss Luo bought a gray LV wallet for her husband in Shenzhen.

She said that her husband usually used LV wallet, not because thousands of dollars will not be spent, the purchase must buy.

The price of luxury goods keeps rising, which makes the online purchasing business difficult.

A shopkeeper named Taobao, who specializes in shopping on behalf of Taobao, said that when he bought CHANEL for customers in May, he found that he had gone up thousands of times, and then bought a lot of goods to sell.

"The buyers of Taobao shop value the price very much. At that time, I sold the bags I sold at the same price, plus the purchase fee."

Sakura Ko said that other friends do purchasing agents, the business has been affected recently, the bag suddenly adjusted the price, and buyers suspected that we started sitting there.

Yingzi added that the price of new products might make 90% new second-hand bags better.

While reporters asked a number of second-hand shops in Guangdong on CHANEL, they said they had sold out and had to wait for replenishment.

Industry perspective

Cai Sujian, President of China Luxury Association, analyzed the price of luxury goods is complex. "Every time the price rises, there will be a surge of sales."

Cai Sujian said that most European luxury companies believe that rising prices will not only lead to loss of consumers, but will accelerate the growth of brand sales.

However, Cai Sujian reminded consumers that buying luxury goods is not bad. We should pay special attention to keeping value.

It should be noted that the limited edition or the luxury goods signed by artists can be preserved for a long time.