Prada looks to double China business in the medium term
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Prada is looking to double its business in key luxury market China, Chief Executive Gianfranco D’Attis said on Wednesday, even as the country faces slowing growth in luxury demand and significant economic headwinds.
“We have a lot of ambitions here in China, to double our business in the upcoming mid-term future. And with that comes also increasing our investments,” D’Attis told reporters in Shanghai.
He did not give an exact timeframe for the ambition but said increased investments would not necessarily mean a major uptick in the number of stores opening across the country.
“Not only the number of stores is important to us, but the quality of stores, bigger stores with more categories, with more localized products, with more experiences, with more hospitality, more events, more special capsules,” he said.
D’Attis, a former Dior executive who took the helm at Prada in January, was speaking at a preview of the brand’s Pradasphere II exhibition in Shanghai. This is the second iteration of a concept that first showed in London.
As well as a deep dive into the brand’s archive and identity, Pradasphere II, which is showing at a museum on Shanghai’s Huangpu River, also includes a Prada-themed cafe and a gift shop in a repurposed train parked alongside the museum.
According to D’Attis, this likely won’t be the last time fans of the brand in China get to enjoy something like the Prada cafe, which boasts premium Italian coffee. Developing a hospitality concept is on the agenda for the brand worldwide, including in China, he said, possibly in 2024 or 2025.
The Prada Group, whose brands also include classic English shoemaker Church’s, reported a 10% rise in third-quarter revenues in November, saying a strong performance in Asia and Europe helped to compensate for weakness in the Americas.
“Developing a hospitality concept is on the agenda for the brand worldwide, including in China, he said, possibly in 2024 or 2025.”
According to consultants Bain, China is forecasted to account for almost 40 percent of global luxury sales by 2030.
D’Attis is hopeful Chinese consumers will return to traveling and shopping in greater numbers in Europe, but said that wouldn’t necessarily impact sales at home.
“Because we have such a different offer abroad than the local offer that we have, we believe that there is no cannibalization,” he said.
“They will continue to spend locally, they will continue to be treated like kings and queens in China and when they travel, they get a different product… than they can find in China. So it’s very complementary.”
Prada is not alone in remaining optimistic about China’s post-pandemic market. Even as luxury growth slows in the world’s second-largest economy, spooking investors, global brands from Louis Vuitton to Chanel have all recently staged events in cities such as Shanghai and Shenzhen.
Questions & Answers
Q.What is Prada's primary goal for its business in China?
What is Prada's primary goal for its business in China?
Prada aims to double its business in China during the upcoming mid-term future. This ambition will involve increasing investments, though not necessarily a major increase in the number of physical stores across the country.
Q.What kind of store strategy will Prada employ for its expansion in China?
What kind of store strategy will Prada employ for its expansion in China?
Prada plans to focus on the quality of stores rather than just the quantity. This means opening bigger stores with more categories, localised products, enhanced experiences, hospitality, events, and special capsule collections.
Q.Does Prada expect Chinese luxury spending abroad to harm its domestic sales?
Does Prada expect Chinese luxury spending abroad to harm its domestic sales?
No, Prada does not foresee cannibalisation. The company believes its offerings abroad are different from those in China, making them complementary, so Chinese consumers will continue to spend locally and when travelling.
Q.What new hospitality concept is Prada developing globally, including in China?
What new hospitality concept is Prada developing globally, including in China?
Prada plans to develop a hospitality concept worldwide, including in China, possibly by 2024 or 2025. This follows the success of the Prada-themed cafe at its Pradasphere II exhibition in Shanghai.
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