Performance Gradually Warmer Prada Market Capitalization Back To 100 Billion, A 3 Year High

Prada, who never goes with the tide, seems to win back to young consumers in their own way and rhythm.

With the gradual recovery of performance, Italy luxury group Prada recently gained 3 million 18 thousand shares in the US Financial Services Company OppenheimerFunds, with an average price of HK $39.8511 per share, with a paction capital of HK $120 million.

After the completion of the OppenheimerFunds holdings, the company has recently held about 130 million 63 thousand and 200 shares of Prada group and its shareholding ratio has risen from 4.96% to 5.08%.

Analysts at UBS said earlier that the Prada retail sales density will rise by 25% in 2020, which is used to measure the level of revenue generated per sales space. The bank expects Prada group's performance to grow at a rate of 7.5% per year after its quiet years.

Since this year, a number of financial institutions including Deutsche Bank, Lyon, Macquarie and other financial institutions have raised the target price and rating of the group.

The picture shows the comparison of stock price changes between Prada group and Salvatore Ferragamo group in the past year.

It is worth noting that before the OppenheimerFunds increase, Prada held a series of 2019 early spring holiday Series in New York headquarters in May 4th, and synchronized live broadcast in New York Times Square.

Prada creative director Miuccia Prada told the US women's Wear Daily that New York is the starting point for Prada to open the door to the US market and that Prada will usher in a new starting point this year.

Prada 2019 early spring holiday show is based on the theme of "dream making night city". Miuccia Prada flexibly combines colors, pop prints and leather splicing elements with the tailoring and profile of the clippits to reproduce the cool style that was not pleasing in 90s.

Different from the more elegant and witty style of the past few years, this year is full of rebellious sense of strength.

Prada 2019 early spring vacation series

In view of the fact that Chinese consumers are becoming more and more important to the group, Miuccia Prada also incorporates elements such as feather with Chinese characteristics to attract more young Chinese consumers.

In fact, Prada has been keeping a low profile towards the early spring series. Miuccia Prada, who did not want to go with the stream, put the women's early spring series a few years ago in June during the men's week. It didn't release the early spring series according to the traditional time in the industry until last year.

As for the reasons for the change, Miuccia Prada said that every brand is changing. "In order to adapt to the market, we should make some adjustments."

Miuccia Prada stressed that he did not like to drift with the tide, but liked to do things contrary to the mainstream trend. For example, the major brands began to merge the fashion show between men and women, but Prada still insisted on holding a man's show alone.

She explained that this is not only because men's clothing business is very important to brands, but also because there are claims that women's clothing products combined with fashion shows will weaken consumers' attention to men's clothing products.

Miuccia Prada is extremely changeable.

Nothing is eternal, and it will develop according to its own rhythm.

When it comes to the question of how long the red tide will last, Miuccia Prada says it can not be generalized because the definition of street trend is too wide, not just as jeans or sneakers, but in the most changeable fashion circle, nothing is permanent.

There is a view that luxury brands in Italy have always been slower in the European luxury industry. Despite the signs of improvement in Prada group's performance, although Prada is still lagging behind other competitors LVMH, Kai Yun group and Hermes, Prada's performance is showing signs of improvement, which is still a dawning for the luxury industry in Italy.

In fact, Prada group's market capitalization is back to 100 billion clubs, which is inseparable from the huge contribution of Chinese luxury consumers.

Faced with the gradual revival of luxury consumption in China, luxury brands that incorporate China into key development strategies have also become the biggest beneficiaries.

According to the bain consultancy report, luxury goods sales in China reached 142 billion yuan in 2017, or about $22 billion 70 million, up 20% from 2016.

Prada group's performance improvement in Greater China has really injected a strong heart into the capital market.

The group launched its official website with e-commerce services in China last year in 12 months. Its online outlets have sold products on the new official website, covering fashion, leather goods, accessories, glasses and other products, and access WeChat payment and Alipay's two payment methods.

Thanks to this, according to fashion headline data, Prada group's revenue last year was about 3 billion 56 million euros, gross profit margin increased from 72% in the same period last year to 73.5%, sales in the Greater China region were 645 million 900 thousand euros, and 7.7% by fixed exchange rate.

The group's chief financial officer, Alessandra Cozzani, explained earlier in a conference call that the Greater China region recorded double-digit growth in the last two financial quarters and January 2018.

From the data, Prada group's performance in the winter and global luxury goods

The cold is almost synchronous. Like other luxury brands in Italy, Prada, a family management oriented business model, has been beset by product aging and declining performance since 2013.

After realizing its own problems, Prada group reviewed its business in 2016, and gradually improved its sales performance by refurbishing the stores, testing new retail flash stores and putting forward the digital marketing strategy "Prada365".

In addition, Prada group has actively absorbed young designers into the group to promote product innovation, adjust product mix, and greatly increase entry-level products to attract new young consumers.

However, the reason for the slow recovery of Prada's performance is related to Miuccia Prada. She never repeats her design, nor blindly caters to young consumers like other luxury brands, or deliberately creates a sense of intimacy, but maintains a constant sense of alienation.

Interestingly, it is the unique style of Miuccia Prada, which has accumulated a loyal consumer for Prada. Like brands, they will not change their styles and preferences because of the changing trend.

Therefore, from another perspective, the insistence of Miuccia Prada has also achieved the purpose of attracting audiences.

In addition to maintaining independence in design, Prada group has different ways of combining fashion and art with other competitors.

When Louis Vuitton, Gucci and other brands continue to cooperate with artists to attract young consumers' attention, Miuccia Prada says she never wants to cooperate with artists, even though many artists are her good friends.

In her view, at present, most luxury brands collaborate with artists for the ultimate purpose of making money.

However, this does not mean that Miuccia Prada has lost enthusiasm for art. She chose to make Prada and art related in a more meaningful way.

Last year, 10 months and a half, Prada launched the renovation of Shanghai's home renovation project in 2011 and was officially opened to the public.

Because of the special significance of the Rong house to the modern history of China, the influence of Prada is far more than the luxury industry, and it has caused the close attention of the social and cultural circles.

Some analysts believe that the "Rong Zhai" has an epoch-making significance for Prada's brand image management in China.

Although the project is not directly linked to sales, it undoubtedly clarifies and further consolidates the Prada intellectual style and high-end art brand image to Chinese consumers, stripping its stereotypes in the Chinese market and letting consumers approach the essence of luxury brands.

It is undeniable that love and market "Prada" is gradually recovering, but there is still a certain distance away from the recovery of performance. Whether there is a new leap in the bottom of the valley, there is still a lot of problems to be solved for Prada, who is unwilling to compromise.

While expanding the Chinese market, Prada group may also Lurk "crisis".

Bloomberg has reported that the global luxury industry should be vigilant. For a brand with high recognition in Asia but poor performance, such as Prada or Salvatore Ferragamo, we need to be vigilant against potential purchasers from China.

As of press release, Prada group (01913.HK) recorded a HK $107 billion 400 million market value today, a record high of nearly 3 years.