Bagaholicboy Muses #70 – Prada Profits Peril

No, I did not come up with the damning headline (we’ve got Vogue UK to thank for that), but it sure makes for interesting reading (the article, not the headline). According to the report, the Prada group (which also owns Miu Miu, Car Shoe and Church’s) saw their profits drop 22%. Bag Snob’s Kelly goes further and adds that ‘they might be facing the end if they do not figure something out quickly‘.

The PPR group (which manages Balenciaga, Bottega Veneta and YSL) saw a dip of first-quarter sales which could have been worse if not for Gucci, which saw a 10% increase in sales during the same period.

On the other hand, ‘Burberry reported growth of more than 20% for the past six months trading today’, with CEO Angela Ahrendts crediting ‘intensified innovation in core outerwear and accessory categories‘ as one of the key reasons of their success.

Now while I’m no analyst (I probably need to get Joe to crunch the numbers), I will say this. In the last six months I bought nothing from Prada, but a bag each from Balenciaga, Burberry and Gucci.

Interesting, no? And what have you bought lately?

Image: Prada

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  • Behonce says:

    I actually think Prada’s SS09 women’s ad campaign as very edgy, sexy and icy. If Prada goes down along with the financial crisis, then we are all going down with it!

  • RedFurDog says:

    Hey guys, I just got started with the BAG CRAZE so here’s my shopping for the past 3 months. Got these for my girl, Roxanne in Chocolate, a vintage Loewe handbag (nice tan leather bought on a whim) and a big Loewe tote not sure what its called.

    For myself, Porter Heat tote (gotta have at least 1 tote), Porter Tanker shoulder bag (for those light days), Mulberry Brynmore, Bottega wallet in Blue (sold it since), bought a Berluti wallet, I couldn’t resist the burnished leather. You have to check it out.

    Collecting watches and having a bag craze is bad. My next bag Balenciaga City.

  • allysya says:

    Hi everyone! Past 6 months – i bought 2 bags from Gucci, 2 bags from LV, 1 wallet from LV and 2 clutches from Kate Spade. Definitely no Prada purchase. I agree with Kevin, Prada is too weird to be worn by normal people.

  • 00o00 says:

    i really spent a lot of effort on that piece hehe!

    i really do think this is an interesting phenomenon, and this financial crisis will separate out the wheat from the chaff.

    prada’s portfolio is much smaller as compared to LVMH and PPR, there isn’t much space to maneuver. they also made a huge lost previously disposing off jil sander and helmut lang. they need to do a collab, introduce lower price point items, keep themselves constantly in the news.

    i predict a heavy summer sales discounting, and an earlier than usual one at such.

  • LuxeLust says:

    I find it a little sad people are announcing the “end of Prada”. This seems too drastic.

    Although looking back over the years Prada certainly did seem a lot more popular about 8-10 years ago than it does now.

    Miuccia is known for the “Prada ugly” look, which when done right has an ability to transcend current trends and fashions and elevate the product and the wearer to another level. You stand out, but people don’t know why you stand out. (Think Carrie’s outfit when she attended Smith’s play in Brooklyn on SATC.)

    Unfortunately, I feel that too much ugly has been creeping into the aesthetic. You stand out, and people know why — it’s because of that hideous bag you’re wearing!

    But Miu Miu will do what she wants when she wants. I doubt that she accepts many people from the business side of things at Prada encroaching on her designs.

    Let’s face it: when she is on, she’s on. When she’s off, well that’s when you see most of a season’s accessories in 90% off sales.

    I think the fashion world, and the Prada Group is just hoping she is “on” again soon, and quickly.

  • Vinny L says:

    Huge Prada fan over here. I’m not too hot about their apparel personally but I’ve been an advocate for Prada accessories and shoes for a long time. I’ve always found Prada to be much more understated than other brands, and I really dig them for that. I for one hope the Prada group bounces back from this.

    As far as Burberry goes though, that’s so great! I think Bailey has done wonders for the brand, and all of a sudden I’m actually starting to get the appeal and charm of Burberry.

  • From The Bagaholicboy That Hails From Singapore says:

    Thanks for your comments guys… again I love the diversity of opinions!

  • Anonymous says:

    hi BB! Congrats for you blog! (and apologize fir my bad english).

    i’m italian and so i tend to buy ‘made in italy’ labels like prada, gucci, fendi, tod’s… personally i’m sorry for the prada loss because their products are much more comfortable than gucci ones. even if gucci is more innovative (thanks to F. Giannini) don’t you think that what they do is more thought for a ‘catwalk’ rather than for everyday use? a gucci shoe weights at least 3 times a prada one for example!

  • Kevin and myMANybags says:

    nothing in prada interest me these days… it’s too weird to be worn by normal people. look at the runway pieces for men. it is just not right.

    as for women’s collections… there is no outstanding bag designs that can get women into a frenzy… unlike the fairy bag last spring summer. not much celebs are carrying anything from prada. or wearing…

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