Apparel Brand Research Project Prada

App arl Brand Research Project PradaBRAND OVERVIEWPrada was founded in 1913 by Mario Prada, Miuccia Pradas grandfather, in Milan. Located in the prestigious Galleria Vittorio Emanuele II, Prada was an goop, stylish store selling luggage, accessories and luxury goods, in fine materials and of forward-looking workmanship.The Milan store pronto became a firm favourite with the Italian aristocracy and the most sophisticated members of the European elite. In 1919 Prada received the warrant of Official Supplier of the Italian empurpled Household, and since then has been able to display the royal Savoy coat of arms and figure-of-eight knots alongside the comp some(prenominal) logo.Miuccia Prada and Patrizio Bertelli started working together in the late 70s, laying the foundations of the multinational expansion that was to come. Patrizio Bertelli broke new ground in the luxury goods sector, introducing a new business model in which he kept direct, internal falsify over all processes, applying uncompromised quality criteria across the entire production cycle. Miuccia Pradas creative talent and avant-garde approach attracted the attention of the global fashion industry, while her aptitude to serve at the introduction from an unconventional vantage point allowed her not only to anticipate, just now quite oftentimes, to set new trends.The classic Prada suitcase was make of heavy walrus skin but as plane travel make heavy suitcases impractical, the company started to make lighter bags and high quality items made of crystals, tortoise shell and wood. They besides sold garments of waterproof fabrics to the U.S. However the company had gone into decline in the 1970s.1950 Miuccia Prada was born. By her mid-20s she had a doctorate in political information and in her 30s, she was a communist. In 1970 she started making backpack bags out of waterproof fabric called Pocone.1979 She took over the Prada family business. Since gross revenue were down, she expanded into l uxury tote bags and backpacks in scorch with flat classic lines, made from nylon.1985 She launched a line of footwear for women and her prototypical pret-a-porter clothing line, using high quality fabrics. Her clean lines gave her fame, and she came to be known for under-stated exquisite garments.1993 She received an International award from the Council of Fashion Designers of America.1995 She won Designer of the Year award.1998 Prada opened their first menswear shop in Los Angeles, USA. They also opened new Prada stores in Manhattan and Las Vegas, as well as Miu Mius first North American boutique, in Los Angeles.Prada is now a worldwide empire, with stores in practically e real country in the western world. It is a million-dollar concern, with every celebrity wearing Prada clothes.2. NATURE OF BRAND AND ITS TARGET MARKETThe Prada cross targets an external customer base that is modern, sophisticated, attuned to stylistic innovations, and expects foxiness of the highest quality. The brands iconic trademarks, which are readily recognized around the world, incorporate the Savoy coat of arms and Savoy figure-of-eight knot, reflecting its heritage as an official supplier to the origin Royal family of Italy. Introduced in the 1980s, Pradas famous black nylon bag with the signature triangle logo has been an enduring classic, with twain the nylon bag and the logo becoming icons in the brands history.The Prada brand represents the best of Italian culture and tradition, sophisticated air and uncompromising quality, and as one of the most innovative fashion brands are capable of re-defining the norm and place new trends. Prada also captured the attention of literary and cinematic audiences when the novel The Devil Wears Prada was first published in 2003, and then was made into a movie in 2006. The Prada brands distinctive originality is built on its unique approach to style, trade and constant innovation in materials and designs, as we unceasingly exert creat ivity in the training of fashionable designs, sophisticated fabrics and innovative production techniques.At the heart of the evolution of fashion, we believe Prada has been a sophisticated interpreter of its times and a forerunner of style and trends. Prada is a premium brand. It is very high quality which unfortunatly comes with a substantially high price tag. 2.1. PRADA GEOGRAPHICAL SEGMENTATIONUnder geographical segmentation, product or service is divided accordingly to geographic units, such as nations, states, regions, countries, cities or neighbourhoods.Directly operated stores, including the epicentres, are designed, constructed and managed in accordance with precise guidelines location chosen are among the most prestigious.2.2. PRADA PSYCHOGRAPHIC SEGMENTATIONPsychographic segmentation divides the market into groups base on social class, lifestyle and individual(prenominal)ity characteristics.The PRADA brand targets an international customer base that is modern, sophistic ated, attuned to stylist innovations, and expects craftsmanship of the highest quality.3. RETAIL DISTRIBITION CHANNELSPrada, Miu Miu, Churchs and Car Shoe products are sold by two distribution channelsThe retail channel, represented by the single-brand stores (including the three Epicentres) directly operated by the company, which currently account for approximately 78% of sales the independent channel of multi-brand stores, department stores and franchises (so called sell).This distribution solution enables the aggroup to have a front line in the most exclusive points-of-sale which are either single-brand or multi-brand worldwide. The Groups commercial strategy is based on a selective analysis of the potential of respective(prenominal) markets, an innovative approach and rigorous control of display and presentation criteria, and a continuous search for original sales concepts. Prada has always pioneered new solutions combining design, architecture, and engine room to create e nvironments that not only encourage sales but also communicate its unique strong brand identity and the cultural influences and values of the Prada world in a consistent and homogeneous way.Towards the end of the nineties, Prada decided to redefine the concept of shopping and enlisted the help of pioneering architects of international renown, Rem Koolhaas and Herzog de Meuron, recent winners of the prestigious Pritzker Prize. The impression of this partnership was the trigger of the Prada Epicenters areas and buildings which have rapidly acquired landmark status both local anestheticly and internationally. Pradas Epicentres have not only transformed the concept of shopping but have also fused it with cutting edge technology and a multitude of cultural stimuli, offering customers a whole range of unique experiences and exclusive services. There are currently three Prada Epicentres one in SoHo, New York (designed by Rem Koolhaas in 2001) an another(prenominal) in Aoyama, Tokyo (Her zog de Meuron, 2003) and the third in Beverly Hills, Los Angeles (also by Rem Koolhaas, 2004).Directly operated stores, including the three Epicentres, are designed, constructed and managed in accordance with precise guidelines location chosen are among the most prestigious and the personnel is selected and practised to provide customers with an exclusive treatment.This type of store contributes to maintaining a very close relationship with customers, providing immediate information about the market trend. Moreover, direct-sale stores also provide very valuable support for the brand, acting as t feel ambassadors communicating the Prada scene consistently and uniformly all over the world.Prada manages the independent shops and department stores channel based on selective distribution and a well-defined strategy of control aimed at maintaining outstanding quality and high volumes, ensuring consistency in merchandising and monitor sales performance. Franchise shops are located in sp ecific markets where this form of retail is imposed by local legislation or custom, and entail partnerships with local entrepreneurs with an excellent knowledge of the relevant market.The wholesale channel, besides ensuring the brand benefits by a series of shop windows in particularly significant positions in place markets, enables a direct and immediate comparison to be made with the competitor brands. Therefore, the sales trend through the independent channel represents a very multipurpose indicator of the consumer trends and brand strength.3.1. PRADAS FALL CAMPAIGN IS ALL ABOUT MODERN FEMININITY AND NEW FACESThe way fashion houses describe their collections and ad campaigns can often sound like pure nonsense. But the person responsible for announcing Pradas fall 2015 campaign did a pretty good job of summing it up as an elegant, humorous ode to meta-modern femininity.Like the collection itself, the campaign shot by Steven Meisel is very pretty, but odd. Theres a sense of is olation in the arrangement of the models, who do not look at or touch each other but stare at an unspecified object off-camera. Theres also a feeling of youth and newness provided by a cast of fairly new faces, including Avery Blanchard, Estella Boersma, Inga Dezhina, Lineisy Montero, Ine Neefs, Greta Varlese and Maartje Verhoef, all of whom have walked the runway for Prada and/or Miu Miu this past seasons.Prada has a knack for casting promising models fairly front in their careers, so while some of them already have a campaign or two under their belts, expect to see these girls even much in the coming seasons. Montero, whom everyone started talking about when she walked in the brands fall 2015 show, has already landed a Teen Vogue cover.4. INTELLECTUAL PROPERTY RIGHTSWebsite as a whole and all material on this Website, as well the Prada trademark, are owned and registered by Prada S.A., a company with registered office at 23 rue Aldigren, L-1118 Luxembourg.Prada website is operat ed by Prada S.p.A., an Italian corporation having its principal place of business at Via Antonio Fogazzaro 28, 20135 Milan, Italy, operating holding company of the Prada Group.Prada S.A. and Prada S.p.A. are collectively referred to as PRADA Prada S.p.A. and its subsidiaries will be collectively referred to as Prada Group hereinafter.All trademarks and logos, whether registered or not, displayed on the Website, including but not limited to the Prada trademark, as well as all the other distinctive marks connected with PRADA and reproduced on the Website, are and will remain the exclusive property of Prada S.A.. These trademarks may not be used in connection with any product or service that does not originate with PRADA, in any port that is likely to cause confusion among users, or in any manner that disparages or discredits the Prada name and trademark and the products bearing the Prada trademark. Prada website and all the cloy included therein, including, but not limited to, all t exts, information, data, images, icons, photographs, illustrations, multimedia content (graphic, audio and video), charts, indices, descriptions, data, software, hypertext markup language codes and screens contained therein and the like (hereinafter collectively Content), is owned by or licensed to PRADA and is subject to protection by international intellectual property laws, including, but not limited to, rights in the nature of patent rights, copyrights, trade secrets, trade names, trademarks, service marks, moral rights, know-how and any other similar rights recognized under laws or international conventions in any country or jurisdiction in the world. All materials contained in this Website, except for the e-store section, are displayed for informational or promotional purpose only. Subject to these basis and Conditions of Use, and except as otherwise indicated on the Website, you may access, download, copy, store, manipulate, reformat, print or display any Content to which yo u have obtained authorized access solely for your in the flesh(predicate) use and not for business purposes. You may not otherwise download, copy, store, manipulate, reformat, print, display, publish, transmit, distribute, create a derivative work from, resell or make any other use of, the Website, or any Content contained therein.No right, title and/or interest deriving from or pertaining to the Content, material or software of the Website may be deemed assigned to or acquired by you as a result of your use of the Website. You agree to accept and abide by all copyright or trademark notices and other notices contained on the Website and in the Content. All rights are reserved in all countries worldwide.People aware that the Prada products are sold exclusively at Prada monobrand stores, at prestigious multi-brand stores and points of sale belonging to Prada S.p.A.s selective retail network, outlets belonging to the Prada Group and in the e-store section of the Website which is only available in certain countries, as fail specified on the Website. Any purchase outside of these points of sale is entirely at the purchasers risk, in particular with regard to the authenticity of any such purchased items.http//www.prada.com/content/dam/external/terms-conditions/EU-EN.pdf5.OWNERSHIP UPON BRANDMiuccia Prada is the co-CEO and lead designer of the handbag and fashion empire Prada, in which she has a 28% stake. In 1977 Miuccia and her siblings Albert and Marina inherited the family fashion business, founded in 1913 by their grandfather. Miuccia met Patrizio Bertelli, who ran a luxury leather company, at a Milan trade show in 1977 and signed him on as a contractor. A stratum later, they were married and Bertelli joined the company, taking care of the business side of things while pushing Prada into new directions. He serves as co-CEO with Miuccia, and his stake in the company also makes him a billionaire. In 1986 Prada opened its first store in New York and expanded be yond high-end suitcases, handbags, and steamer trunks. A few social classs later, the company uncover a ready-to-wear womens collection and a second brand, Miu Miu. Miuccia, who has a Ph.D in political science from the University of Milan, took the company world with Bertelli in Hong Kong in 2011.5.1. BOARD OF DIRECTORSOur table consists on nine Directors, of whom four are executive Directors, two are non-executive Directors and three are independent non-executive Directors.The ordinary shareholders meeting of 26 May 2015 decide to appoint the Board of Directors for a term of three financial years. The boards mandate will therefore expire with the shareholders meeting to be convened for the approval of the financial statements for the year ending 31 January 2018.The below shows the current members of the Boards of DirectorsMazzi, Carlo -chairperson and executive conductorPrada Bianchi, Miuccia -chief executive officer and executive directorBertelli, Patrizio chief executive of ficer and executive directorCozzani, Alessandra -chief financial officer and executive directorCereda, Maurizio -non-executive directorSimontacchi, Stefano -non-executive directorMattei, Gian Franco Oliviero -independent non-executive directorForestieri, Giancarlo independent non-executive directorLiu, Sing Cheong -independent non-executive director5.2. SHAREHOLDERS STRUCTUREAs of 31 January 2015, the shareholder structure of Prada S.p.A. is composed as follows6. LICENCES AND JOINT VENTURESEyewearIn 2000 the PRADA Group developed its first Prada and Miu Miu branded sunglasses, and in 2003 it signed a licence agreement with Luxottica Group, a world leader in eyewear. Under the creative supervision of Miuccia Prada and Patrizio Bertelli, Prada coordinates the conception, design, styling and communications for all collections, while Luxottica has exclusive worldwide rights to the production and distribution of Prada and Miu Miu sunglasses and eyeglasses.not only is this an important b usiness agreement, but it is also an excellent example of comprehensive cooperation in creativity, style, production and distribution between two of Italys foremost industrial groups.FragrancesIn 2003, an agreement was entered into with Puig Beauty Fashion Group, one of the worlds largest producers of cosmetics and fragrances, creating a joint venture for the production, distribution and development of Prada perfumes.Here, too, Prada is actively involved in the various phases of product, creation and development as well as communications, while responsibility for production and worldwide distribution is in the experienced and highly qualified hands of Puig.In 2004, after lengthy and thorough research by Miuccia Prada in cooperation with some of the most qualified noses in the world, Amber the first Prada perfume for women was created. Greeted with unanimous critical and public acclaim, PradaAmber perfume has enjoyed encouraging commercial success in all markets where it has bee n presented. In 2006 Prada unveiled its first mens fragrance, Prada Amber Pour Homme, marking the birth of the first Made in Prada perfumes family under the amber scent.A new perfume for women, Infusion dIris, was launched in 2007, which was the key to developing a series of complementary, innovative and personal products for bodycare and for the home. From this new pillar a collection of limited edition fragrances was derived the Ephemeral Infusion Collection that includes Infusion de Fleur dOranger, Infusion de Tubreuse and Infusion de Vtiver.In 2011, Prada Candy, the third pillar of the Prada fragrances, is launched. A newperfume for women that highlights the funny aspect of the brand also in the beautysector.Mobile telephonesIn 2006, the PRADA Group entered into an agreement with LG Electronics, one of the world leaders in mobile telecommunications technology, to develop an innovative and iconic mobile telephone. By leveraging their respective skills, Prada and LG explored all o f the products aspects together, both in terms of the contents (for example software, user interface and music), and in terms of the presentation (from the design to the packaging) the partnership created the Prada Phone by LG, a unique, sophisticated and elegant telephone, the first in the world to have an interface that is completely touch screen.The Prada Phone by LG was launched in March 2007 in Italy, Great Britain, France and Germany, and later on on the principal Asian markets and in Latin America. The products high qualitative and innovative content enables a significant commercial success to be achieved, with more(prenominal) than 1,000,000 mobile telephones sold.In October 2008 Prada and LG launch the second phone, another quantum leap in mobile phone innovation and design, thanks to ultra-thin keyboard and new enhanced technological features.In December 2011, Prada and LG unveiled the partnerships latest smartphone, the Prada phone by LG 3.0 that combines Pradas distinc tive style with LGs innovative technology, including one of the biggest and brightest screens in the world with 4.3inch and 800-nit screen.7. PRODUCT LOGISTICSProduct distribution is handled through five central warehouses, four in Italy and one in UK. It is managed by a group division which coordinates product storage, shipping and distribution, as well as arranging transport and customs procedures.Central to the Prada Groups distribution strategy is the development of its retail channel in all markets, both consolidated and emerging, focusing in particular on nations with high harvest-festival potential.The Groups distribution network extends across 70 countries, counting 551 directly-operated stores (at 30 April 2014), which form the backbone of the Groups international expansion strategy, and a selection of department stores and multi-brand retail spaces in the most significant cities and stylish locations.The reasons for this strategy are many not only the DOS are the control ling showcase for newly-launched collections, but they also offer a direct relationship with customers and provide real-time feedback on how each product category is performing. Over and preceding(prenominal) their primary role as a sales point, DOS also represent an important communication tool real embassies of each brand, they portray their image in a clear and consistent manner.Direct sales account for about 83% of consolidated revenues while the remaining 17% is generated by the wholesale channel (multi-brand retail spaces and department stores 16%), from franchising (about 1%).8. NET SALES OF PRADA8.1. NET SALES ANALYSIS(amounts in thousands of Canadians)ended January 31, 2016ended January 31, 2015% change sort out sales of directly operated stores (DOS)4,344,81986.30%4,232,86583.90%2.60%Net Sales to independent customers and franchisees631,34912.50%756,21415.00%-16.50%Royalties61,6661.20%54,3291.10%13.50%Net revenues, total5,037,835100.00%5,043,408100.00%-0.10%8.2. NET SALES OF DIRECTLY OPERATED STORES (DOS)ended January 31, 2016ended January 31, 2015% changeNet sales of DOS by geographical areaItaly12.80%11.90%10.70%Europe21.80%21.60%3.30%Americas13.40%13.10%5.00%Asia Pacific35.30%37.90%-4.40%Japan13.20%12.20%10.70%Middle East3.40%3.10%11.50%Other countries0.10%0.10%41.40%Total100.00%100.00%2.60%8.3. PRADA GROUP FIGURESwww.prada.com/ company profileFEBRUARY 20169. big(p) OR MARKET VALUE9.1. INCOME STATEMENTYear on year Prada SpAs net income fell -26.59% from 634.04 million to 465.46 million despite relatively flat revenues. A contributing factor has been an increase in the selling, general and administrative costs as a percentage of sales from 48.33% to 54.41%.Gross margin72.12%Net benefit margin8.76%Operating margin12.92%RevenueNet IncomeReturn on assets6.05%Return on equity9.71%Return on investment7.59%9.2. BALANCE tackYear on year, growth in dividends per share remained flat while kale per share excluding extraordinary items fell by -26.59%. Ad ditionally, five year annualized earnings per share growth is in-line with the industry average relative to its peers.Current ratio22.24Quick ratio1.48Total debt/total equity0.3183Total debt/total capital0.24029.3. exploitation RATES Year on year, growth in dividends per share remained flat while earnings per share excluding extraordinary items fell by -26.59%. Additionally, five year annualized earnings per share growth is in-line with the industry average relative to its peers.Dividends Per ShareDiv yield (5 year avg)0.24%Div growth rate (5 year)Payout ratio (TTM)99.03%Earnings Per ShareEPS growth (5 years)