MILAN, Italy — “We dedicate a lot of time to understand markets, and at the basis there is Miuccia’s work in creating product, which has an identity,” said chief executive officer, Patrizio Bertelli, on the principle causes of Prada Group’s continuing success at the company’s annual general meeting, in Milan, yesterday. The CEO went on to dismiss calls to show collections from group’s Miu Miu label in Milan, as well as the possibility of an IPO on a European exchange.
Looking into the future, Bertelli confirmed 70 to 80 new store openings, including 10 to 12 in China and, “probably,” a store in Angola — he believes Africa “is starting to give the first signs in our sector.” But with regards to acquisitions, the chief executive unequivocally stated the company did not want “any distraction.”
On China, where the group currently has 20 stores, “there is a lot of room to grow, we are halfway compared with others that started there earlier, but we’ve avoided mistakes,” said Bertelli. “We’ll be at the level of our competitors in three years.” Prada’s product mix is the reason it “did not suffer” at the brunt of the country’s recent anti-extravagance legislation, continued Bertelli, stating that “this affects more those companies that make jewels and watches.”
In response to Giorgio Armani’s call for Italian designers to show in Milan, Miuccia Prada concurred with her husband’s statement that “temporal issues” and the material impossibility of staging “two shows a couple of days apart,” precluded any possibility of showing Miu Miu, as well as Prada, in the city. “It’s the way we work, it’s impossible, nobody does it,” she said.
The designer and chairwoman also weighed in on the Internet and the company’s e-commerce position. “It’s a very powerful and delicate issue. You promote the company, rather than selling products, you have the entire world looking at you but you know nothing of them. And if it’s too sophisticated, people don’t appreciate it. It seems that more basic things are appreciated more.” Bertelli declared the Internet “strong,” especially in the US, and was confident that it would be “fruitful” over time.
“No, we are not going to launch an initial public offering on a European bourse,” said Bertelli. “We want a streamlined company that brings advantages to shareholders and this would complicate its management. Hong Kong has different regulations — operating profit is what counts there, not EBITDA, and operating profit is the real result, it’s the bottom line that matters. A mental change would be needed here.”
No 1st quarter results were announced by the company as it is presently in a blackout period. However, Carlo Mazzi, executive director and deputy chairman, stated he was “confident the strategy consistently deployed will be a key success factor in 2013 despite the business environment.” Shareholders shared his cautious optimism, approving a dividend of 0.9 euros, or $1.10, to be paid on June 20, for a total upwards of 230 million euros, or $296.8 million that day.
In the fiscal year, ended January 31, Prada’s net profit increased 44.9 percent, to 625.7 million euros ($800.9 million) on a 29 percent gain in revenues, to 3.29 billion euros ($4.34 billion). As of January 31, 79.98 percent of the company’s share capital was owned by Prada Holding BV, a Dutch company, with the remaining shares listed in Hong Kong.