Prada Market Share Will Shrink

According to the world clothing shoes and hats net, the past three years

The worst performing luxury group

SpA (1913.HK) Prada group's virtual high share price plunged nearly 20% in the past month, and UBS AG (UBSN.VX) UBS's report on Thursday once again gave it a heavy blow.

In its report, UBS pointed out that the Italy group's share price rose from a low level and was mainly stimulated by the rebound in China's luxury market. However, the bank believes that the fundamentals of Prada group can not support its current share price, so its "sale" rating is maintained. The target price is raised from HK $19.5 to HK $20, which is equivalent to 24 times earnings.

For the previously known Prada group known as digitalization and improvement of product and store concept, UBS said it was too early to get results, and faced with its main competitors in the market.

Gucci's strong recovery and competition, Prada group's market share has a continuous downward risk, so the bank lowered Prada's 2016 fiscal year interest rate pre tax profit forecast of 2%, an increase of 1.5% is expected.

Prada group has plunged nearly 20% in the past month, the worst in the industry, and the worst performance in the industry.

In June 2015, Prada group struggled under the HK $39.5 issue price due to the decline of luxury goods market and its low performance. In early 2016, it was below the psychological price of HK $20 and the lowest target price of investment bank.

In the second half of 2016, the terrorist attacks and the devaluation of people in many European countries showed signs of a strong rebound in China's luxury market. As a result of this stimulation, the luxury industry companies generally showed signs of improvement. The share price of Prada group also began to rebound at the end of August. Even after the bad annual performance in April 12th, the share price continued to rise, and it was very close to the issue price at the end of April, but it finally had a long way to go before the issuing price threshold.

For the past year, Prada group's share price has been helped by individual brokerages, European banks have cut interest rates, and brokerages have increased several waves of luxury industry in Italy. No Agency, a research and consulting agency of UBS and fashion industry, has always warned that Prada's fundamental roots can not support its upward trend.

Tang Xiaotang, founder of No Agency, has always said that for the most important Chinese consumers, Prada lacks the "killer package" products such as "killer bag" at the beginning of the listing. Besides, it lacks the strategy of "high marketing and high return" for the Chinese market, and the relative competition has no sense of Prada in China's fashion show, large-scale exhibition, celebrity endorsement market activities.

Prada Group sales briefly surpassed Gucci Gucci brand and promoted to Italy's largest traditional luxury goods company.

Prada family successor Miuccia Prada Bianchi and husband Patrizio Bertelli revived the family brand in the late 1970s, and the group of two people jointly established in 2011 landed at the Hongkong stock exchange to reach the peak of the brand.

However, the group was exposed for 9 months, and 1/3 executives fled. In recent years, the market has repeatedly questioned the management style of Patrizio Bertelli and Miuccia Prada couples. The Miuccia Prada born in 1949 and Patrizio Bertelli born in 1946 are 68 and 71 years old respectively, and two are the chief executives and creative directors portfolio of the oldest industry in the luxury industry. Until the beginning of 2016, Chanel SA Chanel CEO Maureen Maureen was fired, and its "oldest combination" was replaced.

After Gucci Gucci launched young designer Alessandro Michele as creative director, the pformation of the brand was considered a model for the luxury industry. In recent quarters, Gucci Gucci's performance was also called "impossible miracle".

As a brand belonging to Italy, Prada group's "oldest combination" is naturally compared with Gucci Gucci's Marco Bizzarri&Alessandro Michele "high two person group". Many industry analysts believe that Prada group should emulate Gucci Gucci and change core management as soon as possible.

Prada group, Prada and Gucci brand changes in comparable / fixed exchange rate over the past 4 years

Whether the industry analysts compare Gucci Gucci and Prada group, or UBS's latest report thinks that Gucci Gucci will reduce the space of Prada group, because in the open market, Gucci Gucci and Prada group are the most close, while Italy brand has been avoiding the open market.

Gucci Gucci has been in the doldrums for 2014 and 2015 years. It also made Prada group's net sales surpass Gucci Gucci brand. In the 2014 fiscal year, it was promoted to a traditional luxury group in Italy with a slight advantage of 16 million euros.

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However, at the end of 2014 and early 2015, after the replacement of two core management levels by Gucci Gucci, the performance of Gucci Gucci and Prada group ran counter to that: in the 2015 fiscal year, Gucci Gucci resumed growth, while Prada Group recorded a double-digit comparable sales slump. In the 2016 fiscal year, Gucci Gucci became the best performing brand in the traditional luxury industry, while the group was the worst performing group, the group fixed exchange rate sales fell 9%, and the Prada brand fixed exchange rate fell 10.3%.

In the 2016 fiscal year, Gucci Gucci brand sales amounted to 4 billion 378 million euros, Prada group only 3 billion 139 million euros, two years to 1 billion 250 million euros.

Gucci Gucci parent Kering SA (KER.PA), general manager of Kai Yun group, Jean-Fran OIS Palus, at the first quarter results of the group's end of April, said that the soft luxury market has improved significantly, but not all brands have improved. Therefore, for large brands, it is now an opportunity to win the share of local customers in Chinese consumers and mature markets.

At the end of May, at the industry summit held in Lisbon, Portugal, the financial times reiterated the view that the market had become more difficult and the economy slowed down. The market share would rely more on competing competition rather than on the natural growth of the economy as a result of economic growth.

Compared with the pragmatic attitude, administrative efficiency and product innovation ability of Gucci Gucci, Prada group did not have the ability to assess the situation in three points of the earnings report.

Continue to create an unparalleled innovation and quality "and" enhance the online image and enhance the digital environment in the store. "However, the core competitiveness of the leather products has been highly criticized, and the ability to launch new products is even more acute. In addition, the Prada brand of Prada is also in short supply on the Chinese social network. As for the online image and sales, the group's wholesale sales in 2016 account for 16.1%, while the online business is mostly wholesale business and the wholesale business is limited. Even the explosive growth of its online business has made a limited contribution to the group, and the current online growth of the retail industry is usually replaced by the ability to sacrifice physical stores. In the earnings report at the end of April, Prada group said that the company will" uphold its unique tradition and creativity. "

The streamlined cost structure in the annual report of Prada group may be the only effective pformation currently available to the group, but it may also have a negative impact on the group's sales ability.

Tang Xiaotang, founder of No Agency, said that for the luxury industry, its most valuable brand is its own brand value compared to Louis Vuitton Louis Weedon, Gucci Gucci, Hermes Hermes, Prada Prada brand, and the sluggish performance in the past three years will also reduce its brand value and goodwill, "simply speaking, Prada is not worth its product price tag".

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