Prada'S Sales Decline

Recently, Prada announced a 27.6% decline in profits compared with last year. Prada group reported that the net profit of the previous 9 months (up to October 31st) was 31 billion 900 million euros (about 392 million US dollars).

Miu Miu, Prada Group's brand in the past quarter Sales volume An increase of fourteen percent. Prada's shoes increased by 17% in the third quarter, but sales of leather goods dropped by 11%. Fashion brands are improving and broadening their marketing strategies by introducing new products (1000 euro to 1200 Euro range).

Prada executives attributed the poor performance of brand sales to the impact of economic hardship and political conditions on consumers' willingness to consume. The team's third quarter report pointed out that "the luxury market is undergoing a reshaping stage, and its extent and nature are not fully understood."

The brand is particularly bad this quarter. In the first half of this year, Prada's sales in the Far East dropped by two percent. This was originally a major market for the company, resulting in a 13% decrease in the third quarter. Back in October, Miuccia Prada and Patrizio Bertelli After the investigation and confirmation of the Italy tax police, it announced the restructuring of the business.

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In recent years, inventory has become a big problem in the shoe and bag industry. On the one hand, the enterprises that consumers need is not. On the other hand, the consumers of enterprises do not need to stock up in large quantities. Some media exaggerated that three years without production, clothes can not be sold out. Famous enterprises such as Smith Barney, Lining, XTEP, Anta, PEAK, from time to time broke the problem of high inventory. The backlog of Sany's construction equipment is due to the end of the 4 trillion stimulus package and the fall in demand. Clothes are worn by everyone, no matter how big the women's wardrobe is and how many styles they are wearing. What are the clothes and shoes that they worry about everyday? Why don't they know how to satisfy them?

The reason is not that the garment industry is backward, worse than before, but because the business expansion is too fast and the demand is over diversified. The traditional supply chain can not meet the requirements of the business. This seems to be the common failing of many industries to a certain stage. For example, the household appliance industry more than ten years ago, inventory is a big problem. Changhong color TV has to write off billions of inventory, because the production and supply chain system can not keep up with the development of the business under the national and global expansion strategy. However, after ten years of "missed lessons", the household electrical appliance industry has effectively managed the demand from an uncontrolled "horse race enclosure" to a relatively restrained expansion and growth. On the other hand, the overall supply chain management level of the industry has been further improved, although the inventory problem has emerged from time to time, it is mainly a company case rather than an industry disaster like the clothing industry.

For the clothing industry, especially in the fashion industry, enterprises are aware of the importance of diversification. Many clothing companies are all in line with Zara, and even say that they have 10000 kinds of clothing every year. However, although their slogan is "fast fashion", their production and supply chain system is not fast, and still remains in the era of economies of scale, with slow response and long response period. The result is a shortage and backlog. It looks like two different problems. The root is the same: the product adopts differentiation strategy, while the supply chain is not a responsive supply chain, and the two do not match.

Ryui Masa, CEO of UNIQLO, said: "in general, the clothing industry is not a continuous improvement or production of flawless fabrics, but a trend of pursuit", which needs quick response supply chain support. For Zara, h&m and other widely praised industry benchmarks, its advantage is not so much a product design as a highly responsive supply chain, so that enterprises can quickly follow up the latest trend. Controlling the variety of clothing and slowing down the speed of expansion can alleviate the pressure of supply chain, but to really solve the problem, we need to start with improving the response speed of the supply chain.

A few months ago, I went to Ningbo to visit Mr. Chen Hongzhao, general manager of Taiping bird dress department. Mr. Chen is gentle and polite, and his speech is philosophical. He said this sentence, the main idea is that the variety of women's clothing is the first problem that ladies meet every morning: no matter how big the wardrobe is and how many clothes they have, everyone feels that they don't know what to wear. The implication is that the characteristics of the industry are that enterprises can selectively serve some needs and give up others. For example, some companies focus on neutral clothing and some cover certain age groups; however, regardless of which field they enter, styles, colors, sizes, fabrics and seasons are all destined to diversify their needs. The uncertainty of the tide determines that the plan is not as good as the change, and that the quick response of the supply chain is needed to make up for it. Of course, from the operational point of view, a fabric, a color, a size of clothing is best to do, inventory control is best, but such a company will be closed.