Specialist
Former SVP at Prada SpA
Agenda
- Prada (HKG: 1913) – organic sales growth outlook across categories and regions, highlighting recent management change
- Prada’s customer profile, marketing strategies and strengths vs competitors’
- Channel mix analysis – wholesale vs retail vs online
- EBIT margin expansion opportunities
Questions
1.
How significant are the recent management changes Prada has made, and the appointment of new CEO Andrea Guerra? Why did it take the company that long to take these steps?
2.
In terms of Prada’s sales growth in the US, we witnessed really good growth in H1 2022. Do you think we’re likely to see a slowdown?
3.
How does Prada’s US sales growth compare to the company’s growth in Europe?
4.
With the recent easing of coronavirus restrictions in China, what is your outlook for Prada’s sales growth in China across the different categories?
5.
There have been talks about local brands starting to gain popularity in China. In the long term, how might that impact the strategy of a brand such as Prada, which has about one-third of its sales in APAC?
6.
We’re currently seeing more US tourists in Europe. In the short term, do you think this can replace or ease the loss that Europe took with the lack of tourists from China?
7.
Do you see US tourists still adding to Prada’s European sales growth in the short term?
8.
What is your 2023 outlook for AOV or average basket size in the US? How is that likely to trend next year?
9.
What is the percentage of loyal customers for Prada? What percentage are newly acquired customers?
10.
Could you speak to how much Prada spends on customer acquisition? How does that compare to other brands?
11.
In terms of customer acquisitions, what does Prada mostly focus on? Is it entry-point products and younger-generation?
12.
What are your thoughts on Prada’s leatherwear category? What improvements are needed in terms of price and product?
13.
In H1 2022, Prada reported that its leather goods were about 50% of sales, and the company is targeting 60%. When do you think it will be able to hit the 60% target? In general, what is an optimal percentage of leather goods for a company such as this?
14.
You mentioned margins for leather goods are higher than for the rest of the categories. In percentage terms, how much is the difference between leatherwear and other categories?
15.
Besides leatherwear, what are the key challenges within Prada’s product mix in the ready-to-wear and shoe segments?
16.
Do you think we’ll see a decline in sneakers? Could you comment on the main consumer trends in relation to footwear?
17.
How might the consumer evolve in terms of footwear in the medium term? Which segments within footwear are we likely to see performing really well?
18.
Who is Prada’s core consumer? How does the core consumer differ across regions such as China, Europe and the US?
19.
You mentioned sustainability and how younger generations are more sustainability-aware. Could you elaborate on Prada’s sustainability efforts? How is that impacting the company’s image?
20.
You mentioned a large portion of Prada’s consumers are mature, but most of the company’s prices are very entry-level compared to other brands such as Chanel and Hermès. Why is that? How much headroom is there for Prada to increase its prices further?
21.
Do you think we will see price adjustments across the US, Europe and China for Prada?
22.
What is your outlook for Prada’s channel mix split between retail and wholesale for the next 2-3 years? Is that likely to be different across the regions?
23.
Thinking about retail, what is your outlook for store closure or opening in the next 2-3 years? Where is Prada likely to be located in the three regions?
24.
What is Prada’s current online penetration? What do you think would be optimal online penetration?
25.
What are your thoughts on Prada’s inventory management? How can it be improved?
26.
How do you assess Prada’s operating efficiency? How can the company reduce its costs?
27.
Looking at profitability, Prada has one of the highest gross margins in the market. Do you think the company can sustain this in the long term, given its ambitious sales growth plans or targets? What is your long-term outlook for gross margin?
28.
Do you think Prada should be reducing its CAPEX spending? Which areas do you think the company should be focusing on and which areas should it reduce its spending in?
29.
What is your 2-3-year growth outlook for Prada? What would be the main drivers behind growth for the company?
30.
What are your thoughts on the Miu Miu brand’s performance? What is your long-term sales growth outlook for this brand?
31.
Do you think Miu Miu as a brand would still exist after Miuccia Prada retires?
32.
Who do you think would be interested in buying Prada in the event of a potential sale, and why?
33.
Do you think Prada is considering a secondary listing of the product group in Milan? How likely is this in the short term?
