Prada to introduce lower priced products
Prada on Monday posted a worse than expected 28 percent drop in yearly net profit to 451 million euros ($488 million), hit by weakness in greater China. “Trading conditions in Hong Kong and Macau remain unsettled,” Chairman Carlo Mazzi told analysts.
Following the announcement on Monday, Stefano Cantino, Marketing Director, outlined plans for in-store events, delivery and made-to-measure services. Key would be the merchandising mix of each store. “We’re trying to be more specific by country and store,” he said.
Prada will also try to leverage its best-selling models, frequently introducing new versions and launching new styles covering all strategic price ranges, Cantino said, including new bags starting at between 700 and 800 euros. By comparison Prada’s most successful bags include the Galleria starting at 1,400 euros and the Double Bag at 1,800.
To be able to better respond to fast-changing tastes, Prada is also working on its supply chain and looking to hire 300 people in Tuscany where it produces leather goods.
Prada will review its pricing policy after Easter and while there could be reasons to lower prices in Asia there was not much room to raise them in Europe. As it strives to cut costs and shield margins, Prada will open 28 shops at most in 2015, including six conversions of existing outlets. From 2016, Prada will not open more than 6 stores per year.