If the devil wears Prada, apparently he (or she) hasn’t been doing much shopping lately. The Milan-based company is reporting its lowest profits in five years and has plans to uproot its withered laurels and cater a bit more to the modern consumer.
The atelier has been something of the cantankerous grandparent of the fashion world. Yes, the shifting global economy and terrorist threats in Europe have left many sanctified luxury brands hurting, however Prada is suffering more than most due to its minimal online presence and exorbitant handbag prices, even by luxury standards. (Almost $1,000 for nylon? Please stop.)
In the struggling luxury world, “one of the fastest-growing segments is customers [who] are entering the market,” explains Mario Ortelli, senior luxury goods analyst at Sanford C. Bernstein. “They’re buying their first handbags…so they are looking for something with a price that is not so high.” Hence the appearance of petite Fendi Peekaboos, baby Birkins and other smaller, ever-so-slightly less expensive versions of iconic bags, which are still more commonly spied on Kylie Jenner’s Instagram than our morning commutes to work.
The company’s plan for recovery is two-fold. First, hop on the “affordable” handbag train. Prada’s bags for the people will range from about $1,370 to $1,600 and will cater to consumer’s “strong demand for newness,” according to strategic marketing director Stefano Cantino.
The second prong of the approach includes store closures, offering categories like shoes – but, in an arguable counterintuitive move, not clothes – online, and widening its social media presence to Snapchat this coming October. In so doing, Prada hopes to double its e-commerce sales over the next two years.
“I don’t like the word luxury,” attests Chairman Carlo Mazzi. “Value for money is our strategy for the future.” While we don’t see the seminal fashion house going the way of American Apparel, Prada’s rejuvenation plan doesn’t seem drastic enough to match its losses. That said, we wouldn’t be mad if our dream 90s backpack came on the market at a 90s price.
[ via Bloomberg ]