Prada Has Repeatedly Been Trapped In Quality Gate Family Business Management Crisis

At the end of September 2014, Italy's famous luxury brand Prada (Prada) announced that the chairman of the Group Chairman Mucha Prada (MiucciaPrada) and her husband and chief executive, Partizio Bertelli (PatrizioBertelli), were inspecting the Italy authorities for tax investigation.

The group emphasized that the incident involved only two directors' past taxation and had nothing to do with the group or any of its Affiliated Companies.

However, according to local media speculation, the two helmsman suspected of pferring assets to overseas tax evasion has long been taken care of by Italy regulators. It is estimated that the amount of assets pferred is as high as 390 million pounds (about 3 billion 850 million yuan).

A week before the tax evasion scandal, Prada just released what it called "the worst semi annual report in history".

In the half year to July 31, 2014, the group's revenue increased by 1.3% to 1 billion 751 million euros, while group net profit dropped by 20.6% to 245 million euros.

From the regional perspective, the Asia Pacific market, which has been a "locomotive" of Prada performance, has lost its momentum.

In the Asia Pacific region, Prada has 164 direct outlets, and sales in the first half of this year dropped by 1.3%.

For a time, this 100 year old store came from home and abroad.

The luxury brand of "quality gate"

"That movie made Prada hot overnight in the world and became one of the luxury brands that many Chinese worshipped."

On the eve of 2014 national day, reporters conducted a micro survey of luxury goods using WeChat and the Internet, and recovered 96 valid questionnaires.

Up to 80% of the participants thought that the 2006 movie "the devil wears Prada" made Prada a household name in China.

Also, as the movie shows, Prada has been sticking to the high cold line and never putting down its posture.

When many luxury goods begin to diversify in design and channel, Prada still relies on a classic "killer bag" to walk the world.

From the point of view of product structure, Prada sells mostly its classic and basic funds, and lacks freshness.

Professor Chen Liping, director of marketing department of Capital University of Economics and Business, told reporters that while many luxury brands in the world were trying to cater for the Asian market to launch new products, Prada's design remained static and hard to attract the attention of consumers.

"Prada's consumers in Europe and the United States are over 40 years old, so its design and sales are very traditional, strictly abide by the concept of luxury high above, and it lacks familiarity for the main group of luxury goods consumers in China."

Chen Liping said.

With the exposure of popular beauty shows such as gossip girl and single poison mother, Prada's killer pack marked by the inverted triangle metal Logo has become the "Itbag" of the tide, and has pushed the brand effect to the top. However, Prada has not been able to catch up with the success, and has repeatedly produced product quality problems.

In 2013, a "if you buy a Prada bag for a year, the zipper is not bad, Logo did not fall, did not open the line did not fade, the quality bar is good, basically can confirm that you bought a fake" micro-blog has been widely disseminated, this micro-blog is called "advanced black" by many netizens, it is actually satirical Prada quality problem.

However, unlike the Gucci, Cartire and other brands that had also been caught up in the "quality gate" quickly, the Prada employees even responded to consumers by using "colorless, tasteless high-grade glue and poor wear resistance".

The sequel of the great leap forward

"Last year (2010), sales of Prada handbags in China increased by 80%, and sales of MiuMiu brands under the group increased by 500%. We believe that this is only a very superficial part of China's huge potential."

In 2011, SebastianSuhl, then chief operating officer of Prada, said publicly.

China's luxury market has explode like a blowout. Prada has also set an ambitious plan of moving eastward.

Prada's report shows that 2014 to 2016 brand plans to open 120 stores in the world, of which the new stores in China will be located in the second tier or even three tier cities, such as Urumqi, Xinjiang.

From the data point of view, Prada has opened 75 new outlets in China in the past 12 months, including Prada41, MiuMiu29 and Church 'S5.

Chen Liping told reporters that the craziest moment of Prada's great leap forward expansion was just the period when China's large shopping centers were undergoing a big adjustment. At that time, the Merchants Department of many shopping malls and shopping malls carried out strict checks on ordinary brands, and the monthly sales volume was not up to standard.

The luxury brand is an active invitation. It not only gives favorable starting conditions, but also offers a good deal of rent after opening a store.

At the craziest moment of opening a store, Prada has set a record of opening 4 stores in Shanghai in two months.

This sequel of the great leap forward has led directly to Prada's economic crisis, and the brand's financial position is not so good.

Due to the wide opening of stores, the decline in sales of single stores directly led to the shrinking of disposable cash in Prada's hands. The rise in the cost of the same period was even worse.

Zhou Ting, deputy director of the international brand management center of the Ministry of Commerce, told reporters that for a long time, opening stores to promote performance is a regular strategy for luxury goods, which will achieve remarkable results in many cases.

But in the face of the changing market, blind expansion of stores may lead to tight financial services and ultimately short-term performance is just like a flash in the pan.

In 1913, Prada was a retail store specializing in leather goods and imports.

The founder of Prada, MarioPradaandBrother, visited Europe in to purchase exquisite bags, accessories and clothing for the upper class.

In 1919, Prada became the Royal supplier of royal household in Italy.

After the late 70s of last century, Prada's grandson Miao's outstanding efforts made the brand's reputation and reputation grow day by day.

However, like all family businesses in Italy, Prada has a rather old-fashioned way of management.

"Many entrepreneurs believe that they are the most important assets of a company, so they never consider decentralization, nor do they consider introducing other shareholders.

The Italians are very creative, but many want to maintain their status as "King" and "Queen" in the Empire.

They can not separate property from management. This is caused by traditional culture and values in Italy. "

GiulianoNoci, Professor of marketing at Italy Milan Polytechnic University, told reporters.

Prada has publicly disclosed that 94.89% of the group's shares are held by Prada family and Group CEO Bertelli, while the Bank of Italy St Paul holds more than 5.11% of the shares.

And after its listing, management contradictions become more prominent.

In 2011, Prada group was listed on the Hong Kong stock exchange.

However, just six months after listing, Prada lost 1/3 of its management staff. When Charead Prada's IPO prospectus was found, 8000 employees and 14 senior managers were responsible for the daily operation and management of the company.

Its 2011 Annual report shows that 5 senior executives have left. They are chief operating officer of the group, chief executive officer of Asia Pacific region, chief executive officer and HR Director of Prada, USA and Germany.

A former Prada employee told the media that PatrizioBertelli's arbitrary management practices are the main reason for the high turnover rate.

"Husband and wife file like Prada" is a typical representative of the family business "stick to the clique". They believe in their business philosophy. With the rapid maturity of China's domestic consumers and the increasing amount of information, luxury brands have ended the honeymoon period in the previous few years with domestic consumers.

A netizen who participated in the survey was leaving a message.