Prada is no longer: trapped in quality doors

On September 30, 2014, Prada, an Italian luxury brand, issued an announcement saying that the group's chairman Miuccia Prada and her husband and CEO Patrizio Bertelli ) is being investigated by Italian authorities for tax inspections.

The Prada Group emphasizes that the incident only involved the past taxes of the two directors and has nothing to do with the Group or any of its subsidiaries. However, according to local media speculation, the two helmsman's alleged transfer of assets to overseas tax evaders has long been noticed by the Italian supervisory authorities. It is estimated that the amount involved in the transfer of assets will be as high as 390 million pounds (about 3.85 billion yuan).

One week before the “tax evasion” incident, Prada just announced what it called “the worst semi-annual report in history”. For the half year ended July 31, 2014, the group's revenue increased slightly by 1.3% to 1.751 billion euros, while the group's net profit dropped by 20.6% to 245 million euros. From a regional point of view, the Asia-Pacific market, which used to be the locomotive of Prada performance, has lost its momentum. In the Asia-Pacific region, Prada has 164 direct-operated stores and other channels. In the first half of the year, its net sales decreased by 1.3%.

For a time, this hundred-year-old shop suffered from internal and external problems.

Repeatedly stuck in the "quality door" luxury brand

“That film made Prada a global favorite overnight and became one of the luxury brands that many Chinese worshipped.” On the eve of the National Day in 2014, the reporter used WeChat and the Internet to conduct a micro survey of luxury goods and to recover valid questionnaires. 96 copies. Up to 80% of the participants believe that the release of the film “The Devil Wears Prada” in 2006 made Prada a household name in China.

As the film shows, Prada has always insisted on taking the high cold line and has never put aside.

When many luxury goods began to take a diversified path in design and channels, Prada still relied on a classic single product “killer bag” to go global. From a product structure point of view, Prada sells more than its classic and basic models, lacking freshness. Professor Chen Liping, director of the marketing department of Capital University of Economics and Business, told reporters that when many luxury brands launched new products to cater to the Asian market, Prada's design remained unchanged and it was difficult to attract consumers' attention. “Prada's consumer age in Europe and the United States is more than 40 years old, so its design and sales are very traditional, and the strict observance of the concept of high luxury is a lack of graciousness for young Chinese consumers who are the main consumers of luxury goods. Sense.” Chen Liping said.

With the frequent exposure of popular TV dramas such as "Gossip Girl" and "Damma", the Prada "killer bag" marked by an inverted triangle metal logo has become the "It bag" of the influx of people and has pushed the brand effect to the top. , but Prada did not succeed in chasing, but constantly broke product quality problems.

In 2013, "If you bought a Prada bag for a year, the zipper is not bad, the Logo hasn't gone out, no line hasn't faded, the quality is good, and basically you can verify that you bought a fake product." Widely spread, this piece of microblogging is called "superior black" by many netizens. It is ironic about Prada's quality. However, contrary to the rapid implementation of brands such as Gucci and Cartier, which were once caught in the "quality door," Prada employees even responded to the consumption with the "use of colorless, odorless, high-grade glue, and poor wear resistance." By.

The Aftereffect of "Great Leap Forward"

“Last year (2010) sales of Prada handbags in China increased by 80%, and the Group’s Miu Miu brand sales increased by 500%. We believe that this is only a very surface part of China’s huge potential.” 2011, when Prada Chief Operating Officer Sebastian Suhl said publicly.

At that time, the Chinese luxury goods market broke out like a blowout. Prada also formulated an ambitious "Eastward Migration Plan."

Prada financial report shows that the brand plan for 2014-2016 will open 120 stores worldwide, among which, new stores in China will be located in second-tier cities and even third-tier cities, such as Urumqi in Xinjiang. From a data point of view, Prada has opened 75 new stores in China in the past 12 months, including 41 Prada, 29 Miu Miu, and 5 Church's.

Chen Liping told reporters that the craziest moment of Prada's big leap forward expansion coincided with the period of large-scale adjustment of China's large-scale shopping malls. At that time, the investment promotion department of many large-scale shopping centers and malls imposed strict assessments on ordinary brands. , clear out of the mall. While luxury brands are actively invited, they not only give generous start-up conditions, but also offer discounts after opening a store.

In the craziest moment of opening a shop, Prada once set a record of opening 4 stores in Shanghai for two months.

The sequelae of this “Great Leap Forward” directly led to Prada under the background of the economic crisis, and the brand’s funding status was not so good. As Guangkaidian, comparable to the decline in single-store sales, directly led to the shrinking of disposable cash in Prada, the cost increase over the same period is even worse.

Zhou Ting, deputy director of the International Brand Management Center of the Ministry of Commerce, told reporters that long-term promotion of store sales is a routine strategy for luxury goods, and many times it will achieve remarkable results. However, in the face of ever-changing market changes, blind expansion of the store may lead to tight brand finances, and ultimately short-term performance is just a flash in the pan.

Family Business Management Crisis

In 1913, Prada was a retail shop specializing in leather goods and imported goods. The founder of Prada, Mario Prada and Brother, visited Europe to purchase exquisite bags, accessories and clothes for the upper class to enjoy. In 1919, Prada became the Royal Italian royal supplier. After the end of the 1970s, after the great efforts of Prada's grandchildren, the brand's reputation and reputation grew.

However, like all Italian family businesses, Prada management is very old-fashioned.

“Many entrepreneurs believe that their talent is the company’s most important asset, so they never consider decentralization, nor consider introducing other shareholders... Italians are very creative, but many just want to maintain their own in the “empire” "Kings" and "Queens" status. They can not separate the property and management, which is caused by Italian traditional culture and values." Giuliano Noci, professor of marketing at Milan Polytechnic University, Italy, told reporters.

Prada had publicly disclosed that 94.89% of the group's shares were held by Prada Family and Group CEO Bertelli, while Sao Paulo Bank of Italy held the remaining 5.11% of shares.

After its listing, management conflicts have become more prominent.

In 2011, the Prada Group was listed on the Hong Kong Stock Exchange. However, just half a year after the listing, Prada lost a third of its management staff. When the reporter consulted Prada's IPO letter of intent, it was discovered that 8,000 employees and 14 senior managers were responsible for the day-to-day operation and management of the company. According to its 2011 annual report, five senior executives have already left. They are the group's chief operating officer, the chief executive of the Asia Pacific region, the president of the United States, Prada, Germany, and the human resources director. A former employee of Prada stated to the media that the current management chief Patrizio Bertelli's arbitrage management practices are the main reason for the high employee turnover rate.

“The husband and wife team like Prada is a typical representative of the family firm 'Closure School' who believe in their own business philosophy. With the rapid maturation of Chinese domestic consumers and the ever-increasing amount of information, luxury brands are Domestic consumers ended the honeymoon period of previous years." A netizen who participated in the survey would leave a message.