Prada to cull wholesale sales channels
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Italian luxury fashion label Prada is to cull its wholesale distributor list, in order to take more direct control of pricing.
In a short filing with the Hong Kong stock exchange (where the company is listed), Prada said that its board has analyzed in detail the structure of its wholesale channels “and noted the growing complexity and fragmentation of the wholesale market”.
Consequently, the board has resolved in favor of additional rationalization of its network of independent partners.
“The Prada Group considers it essential to ensure greater consistency in pricing policies across retail and digital channels,” said chairman Carlo Mazzi in the filing.
“This strategic review is intended to further strengthen the Prada Group brands with the aim of supporting sustainable long-term growth.”
The statement offered no further details of how the rationalization would be undertaken or how many wholesalers would be culled, although it is apparent online distribution may be most affected.
Like many luxury brands, Prada wants to maintain relative product pricing between wholesalers and its own stores, in much the same way Apple has succeeded globally.
Questions & Answers
Q.What is Prada's main reason for reducing its wholesale distribution?
What is Prada's main reason for reducing its wholesale distribution?
Prada aims to take more direct control of its pricing. The board noted increasing complexity and fragmentation in the wholesale market, making consistent pricing across retail and digital channels essential for the group.
Q.How does Prada expect this change to benefit its brands long-term?
How does Prada expect this change to benefit its brands long-term?
The strategic review is intended to further strengthen the Prada Group brands. This aims to support sustainable long-term growth by ensuring greater consistency in pricing policies across all sales channels, including digital.
Q.Which part of Prada's wholesale distribution is likely to be most affected by this decision?
Which part of Prada's wholesale distribution is likely to be most affected by this decision?
While the company offered no specific details on how the rationalisation would be carried out, the article indicates that online distribution may be the area most affected by these changes.
Q.Which company is mentioned as a successful example of managing product pricing like Prada intends to?
Which company is mentioned as a successful example of managing product pricing like Prada intends to?
The article mentions that Prada wants to maintain relative product pricing between wholesalers and its own stores in much the same way that Apple has succeeded globally with its pricing strategies.