The Two Generation Is Getting Better And Better. Prada Group'S Pformation Path.

For the long term development of the group, Italy luxury group Prada (Prada) implemented the pformation strategy two years ago and strengthened its investment.

At present, the reform strategy has been effective.

In the 2018 fiscal year, Prada group's sales grew for the first time in four years.

PatrizioBertelli, chief executive of Prada group, said 2018's performance showed that the recent initiatives of the group received positive feedback from the market, and they will continue to accelerate the reform process in the future.

He is convinced that the measures currently implemented are necessary for the future development of the group and will create value for shareholders in the medium and long term.

Digital channel investment

Prada Miuccia Prada and Patrizio Bertelli's son Lorenzo Bertelli joined the group as director of marketing and online brand communication in 2017 to help Prada pform digitally.

At present, he and his team are gradually enhancing Prada's online business capability, and plan to complete the global online business promotion in 2020.

In the process of reform, they will not only develop digital projects to enhance consumer interaction, but also improve the efficiency of the group's online business by introducing new technologies.

The technology and digital strategy that Prada is actively implementing has achieved initial success, bringing two digit growth to online sales in fiscal year 2018.

In 2019, the group will continue to expand its multi-channel business.

Previously, the Prada brand emerged as a sponsor of the thirty-sixth Americas Cup Sailing Challenger selection series.

Lorenzo Bertelli said the Prada brand image is highly athletic, and sponsoring the Copa America will help the group reach more young consumers.

At present, the brand communication business of group 50% is completed by digital channels.

Although Europe, the United States and China have already achieved multi-channel operation, they have not yet achieved their desired goals, and they will continue to improve online shopping experience.

PatrizioBertelli said that digital pformation fundamentally changed the relationship between groups and consumers, so that they know more about their choice of purchase.

In this case, communication is more important for effective contact with customers.

In the future, Prada group will continue to invest in all digital assets and create a more immersive brand experience by engaging in unique and attractive interactions on all contacts.

The group will also strengthen investment in infrastructure to ensure that it can promptly respond to different needs in different markets and reach more millennial generation and Z generation with potential to become luxury consumers.

At the same time, the group will continue to launch flash shops and renovate stores to enhance the attractiveness of brands to consumers.

Reasons for the decrease in profits

In addition to digital reform, Patrizio Bertelli has also turned its attention to the group's production problems in Italy.

In June 2018, the group set up a new garden factory in Tuscany (Tuscany) Valvigna.

The park has four buildings with a total area of more than one million square feet (93 thousand square meters).

In the park greening alone, the group spent 2 million euros.

Patrizio Bertelli said that the group's industrial investment has been completed.

They renovated all industrial facilities in three years and increased logistics facilities.

At the same time, he also explained the increase in group spending.

He said that the unstable political situation, Britain's departure from Europe and the rising of raw materials all had an impact on the market and formed a very challenging environment.

All companies that regard Italy as the main commodity producing area all hope that the manufacturer can maintain the first-class craft and excellent product quality.

But the era of flourishing handicraft has passed. Many veteran artists have reached retirement age, and the outstanding handicraft skills are also facing a situation of no successor.

The group can only increase investment and ensure product quality.

Walter Woo, an analyst at CMB International Securities Ltd., China Merchants Bank's financial services agency, said that although Prada group adjusted its annual profit forecast because of the slowdown in China's business, the drop in profits by 18% was still unexpected.

According to their observation, the group's business in China did not show any signs of improvement in the first two months of fiscal year 2019.

They speculated that the Prada group's business growth in fiscal 2019 would still be somewhat slower than other luxury goods groups.

The upgrading of product design and the reform of retail mode in Chinese market will take some time to complete.

In March 18th, "ornate ambition" reported that in order to enhance the profitability of the group and protect the brand image, Prada announced plans to stop the sale of the stores at the end of the season.

PatrizioBertelli said: "we have decided to stop selling price cuts from 2019.

We believe that this decision will further enhance brand image, and in particular, ensure higher profitability. "