Prada hopes cheaper bags will solve sales slump
Prada plans to introduce lower-priced handbags as means of reversing its stagnant sales.
The Italian luxury business has been hurt in recent years, due to collapsing demand in China, the strong dollar and unrest in Europe.
At an investor presentation in New York on Monday (11Apr16), Prada Strategic Marketing Director Stefano Cantino said handbag sales were a focus for the Milan-based company, and they hope to introduce more bags costing between 1,200 euros (£960) and 1,400 euros (£1,120).
“We are working deeply to really fill all the price ranges,” he said according to Bloomberg, adding, “There is strong demand for newness.”
Prada introduced see-now-buy-now bags for fall after their Milan Fashion Week show in February (16), and claim feedback about the concept has been "extremely positive", though admitted it may have been due to the surprise factor.
The company, which is listed in Hong Kong, needs to kickstart growth after posting its lowest profit in several years.
Prada reported on Friday (8Apr16) they had a 26.6 per cent drop in profits in the 12 months ended January 31 (16) to 330.9 million euros, or £263 million, on flat sales of 3.54 billion euros, or £2.82 billion.
Stefano added that Prada, which has 618 stores globally, plans to double its e-commerce sales over the next two years by increasing the number of categories it offers online, particularly shoes.
Though they are unlikely to start selling their clothing on their own website anytime soon, the brand is aiming to start working with partners such as Yoox Net-A-Porter to sell its products on multi-brand e-shops.
Executives also revealed they will be offsetting new shop openings with selective closures in coming months and will downsize some existing stores over the next two years.
They will also be expanding social media activities and are set to be on Snapchat by October (16).