Prada also needs “cash cows”.
Young people cannot afford ready-to-wear, but at least they can afford lipstick.
According to the fashion business news, recently, Italian luxury brand Prada announced a long-term license agreement with L’Oreal. L’Oreal Group will create, develop and sell high-end beauty products for Prada. The agreement will take effect on January 1, 2021. Yesterday, Prada published a Announcement on the Hong Kong Stock Exchange confirmed the news.
According to the “LadyMax” news from fashion business self-media, similar cooperation between Prada and Spanish perfume giant Puig Group has signed a perfume and beauty license agreement. During the cooperation period, from 2003 to 2018, Prada in the perfume market The share quadrupled. But it is clear that such results are not enough.
According to Prada’s financial reports for the past five years, Prada’s stock price fell sharply in 2015 due to the decline in sales in the Chinese market. The market value of the company fell by at least 60 billion Hong Kong dollars in that year, a 56% reduction. The performance was sluggish, and Prada’s performance began to recover slowly until the third quarter of 2016. In 2018, UBS analysts expect that Prada Group will grow steadily at an annual rate of 7.5% from this year. Under the circumstances of global bottlenecks in the growth of luxury goods, Prada’s change comes from the strategic shift after the sharp decline in performance.
In addition to introducing young designers, store renovations, testing pop-up stores, and digital marketing strategy “Prada365”, Prada Group began to adjust its product structure and increase entry-level products “at your fingertips”. Thanks to this, 2018 In the first quarter, Prada’s market value hit a three-year high of 107.4 billion Hong Kong dollars.
In addition, from March this year, Prada’s stores will stop discounting at the end of the season. Previously, Prada used discounts as a regular sales method. Although discounts can bring relatively low-level consumers, but for luxury brands, It is more like “drinking thirst to quench thirst.” Inventory has been removed and revenue has come up, but the core consumer group has begun to loosen. Similarly, since 2016, Gucci’s creative director Alessandro Michele, the products of the season are no longer sold at a discount.
Actually, Prada’s cooperation with L’Oreal is not surprising. In terms of product structure, CHANEL provides a perfect sample, from customization to ready-to-wear to handbag accessories, and finally beauty perfumes. CHANEL has created a solid pyramid model. Advanced customization and ready-to-wear are responsible for shaping the brand value, while handbags, glasses And other accessories, like beauty perfumes, serve as the brand ’s “profitWhen “. The data also verified this. According to the 2018 CHANEL financial report data, the beauty business accounted for one-third of total sales. According to the” lipstick effect “, the beauty business will also be the most stable source of revenue. .
After all, beauty is a luxury product that can quickly get started in the post-90s generation. At a time when the global economy is facing recession, at least you can afford lipstick when you don’t have much money in your pocket. An official data from Tmall shows that at 10 o’clock on October 21 this year, within 10 minutes of the 2019 Tmall Double 11 pre-sale opening, 7 beauty brands including Lancome, L’Oreal, Shiseido, HR Helena, Olay, and Whoo The turnover quickly exceeded 100 million. Estée Lauder’s pre-sale began to achieve a transaction value of nearly 500 million in just 25 minutes, exceeding the full-day turnover of last year’s double 11 last year, and the first day of transaction reached 587 million yuan.
In addition, Prada has also worked hard on social marketing. Compared to CHANEL and Gucci, Prada’s popularity is not high enough. This year, she signed a traffic star Cai Xukun to start with idol culture to approach young people. Fans of “stalls” love to frequently picture on social platforms and serve as Prada tap water.
As a co-branded model for connecting young people, Prada is also active this year. In November, it was announced that it would produce co-branded models with Adidas. A week ago, it was announced that it would be launched in cooperation with Japanese high-end stationery brands. Modori * Prada series, currently this series is only available from December 8th to 31st at the Taipei 101 flagship store.
From co-branding to lipstick, Prada is getting younger and younger.
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