Prada Surrender The Worst Report Card After Listing

The Prada group, which has set an annual growth rate of 44.9% after the listing, has exposed its first annual performance decline since its listing in 2011.

China's Asia Pacific region's decline is more than 7% based on fixed exchange rates.

The report interpreted the decline in the Asia Pacific region as an important market for China, Hong Kong and Macau, which is affected by political factors. The industry pointed out that the weakening of the brand is related to its lack of innovation and its weakness in the brand. If it fails to break through the bottleneck, it will become the next Gucci.

In February 22nd, Prada group released its 2014 fiscal year financial report.

As of January 31, 2015, the group's total revenue in fiscal year 2014 was 3 billion 552 million euros, down 1% from the same period last year, which is the first time Prada group has seen a decline in performance in recent years.

Since its listing in Hongkong in June 2011, Prada group's performance has been rising all the way. In the 2012 and 2013 fiscal years, it rose by 44.9% and 12% respectively compared with the same period last year. In just two years, the performance in the 2014 fiscal year ended.

Financial reports show that the Asia Pacific region, which is located in the Chinese market, is the most serious market decline.

In the 2014 fiscal year, Prada group's performance in the Asia Pacific region fell by 5%, down 7% at a fixed exchange rate.

As the group's world's leading market, the Asia Pacific region rose by 32.5% and 11% in the 2012 and 2013 fiscal year, respectively, but suddenly collapsed in the 2014 fiscal year.

The sharp decline in performance is visible from the group's cancellation of the shop plan.

In early 2014, Prada group planned to set up 10-15 stores in China and 80 new stores worldwide.

However, after the mid term financial report released last year, Prada group reduced the number of stores worldwide to 65.

Donatello Galli, the group's chief financial officer, also said it would cut costs and adjust the product structure. The target of adding 50 new stores in 2015 will be canceled or delayed, thereby enhancing the gross profit margin of the company.

Among the brands under the Prada group, Prada, the main brand that accounts for over 80% of the group's revenue, has become the worst hit area that has dragged down the performance of the 2014 financial year.

In the case of MIUMIU growth of 4% and Church 's growth of 14.8%, Prada fell 1.7%.

"For some brands, there is saturation and brand fatigue in specific markets such as Asia," Scilla HuangSun, head of Julius Baer luxury brand fund, told the media.

Some commentators believe that Prada is the victim of brand fatigue.

After Gucci's performance has declined year by year, Prada has become another brilliant luxury brand.

The group said in its financial report that the performance of Prada brand in different regional markets is quite different, while the decline in Asia Pacific performance is attributable to the adverse effects of political factors on China's Hongkong and Macao markets in the second half of last year.

The mainland market affected the group's sales in January due to the Chinese New Year.

The industry believes that the decline and expansion of the brand is the cause of the decline in brand value.

Over the past year, Prada has been one of the most popular luxury brands.

After passing the bonus period of Asian market, the excessive expansion of the old luxury brand has made the brand exposure too high.

The mind is greatly reduced.

At the same time, in the process of self-help, many luxury brands still choose to raise prices to stabilize and enhance brand positioning.

For example, Gucci has cut down many low price products, but over the past 4-5 years, the price of products has increased by more than 40%.

The emergence of low-priced luxury brands and fashion brands further diverts young customers.

The industry generally believes that the old luxury goods are facing challenges of remodeling and innovation, while Prada is inferior to LV and Hermes in terms of product innovation and brand image maintenance.

LV has launched Nicolas Ghesquiere after the departure of Marc Jacobs, a creative designer. Hermes is committed to creating the image of high-end luxury goods, and Prada has been short of change and fashion in recent years.

Industry analysts and investors say that lack of creativity affects brand reputation, which will ultimately hurt investors' interest and growth prospects.