overview

“Prada Group achieved very satisfactory results in the first half of 2018 with revenue growth across brands, markets and products, along with margin progression, despite continued investment in product quality and innovation, visibility of the brands and the digital evolution.

We are always working to reshape the Prada Group to adapt to the rapid changes in society and to interpret the spirit of new generations without losing our brand integrity. Today the results of this transformation are visible and supported by many positive signs from the market, confirming the soundness of our strategic choices.

We will continue our path of sustainable growth, based on the creative leadership of our brands and the attractiveness of our retail network, where we see great potential to be unlocked through integration with digital technologies.

I am confident that this new phase of growth will be translated into value creation for all Group stakeholders.

 

Patrizio Bertelli

August 01, 2018 -  Prada Group H1 2018 Press Release

Key Figures December 31, 2017
3,057

€M Revenues (pro-forma)

12,112

Full-Time Equivalent Employees

625

DOS

70

Countries

    Key Highlights
    Profit & Loss
    NET SALES H1 2018

      *excluding royalties

      Direct Operated Stores
      H1 2018
      share price and shareholding structure
      08 aug 2017 - 4:08 am
      27,15 HKD +1,88%
      OFF
      integrated VALUE CHAIN

      One of key success factors of the Prada Group is the integrated management of the whole production, the direct control of the strategic phases - from the creation and development of the product, to orders, supply, main processes and distribution – and the ability to innovate in all stages. 

      This approach has allowed the Group to translate avant-garde concepts into innovative exclusive products, to rapidly initiate large industrial productions, distribute products in exclusive locations through a top-level service in order to effectively satisfying customers’ requests and maintaining strict control over quality standards.

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      OFF
      La catena del valore

      The teams of designers of each brand of the Group are composed of talents boasting qualified professional and training background. Driven by their intellectual curiosity and creative sensitivity, they constantly seek new solutions to be translated into products able to define - and often anticipate – new trends. Experience and dialectics are the essential components of the design content that distinguishes every product which is developed experimenting the use of new materials and manufacturing techniques.

      The Groups’ brands operating in the fashion industry present their new collections through fashion shows and events held at show rooms in order to allow merchandisers and buyers from all over the world to know their new products. Sharing the processes that led to the creation of the collections and their interpretation, filtered through the demands of each market, enable costumers to access exclusive and quality content that characterize every product of the Group.

      Selecting the right suppliers is fundamental for achieving the highest quality standards. The Group has always relied on the best suppliers of raw materials, , in their own right leaders and reference in their sectors.  In most cases, these are long-term relationships, initiated following a rigorous selection process, whose strict parameters are intended to ensure the highest standards of technical, economic and ethical reliability. 

      During the financial year ended December 31, 2017 the Prada Group purchased materials from about 530 suppliers, about 82% of them located in Italy, 9% in other European Union countries and the remaining 9% in other Non-U.E. countries. The Group has been collaborating with 60% of them for more than 10 years, and with 16% of them for a period between 5 to 10 years.

      Raw materials – leather, fabrics and yarns - are an essential component of the quality of the product, thus representing a vital interest for the Group. 100% of hides come with a certificate of origin a data sheet guaranteeing quality and compliance with standards, and certification regarding the parameters stated on the Group's Restricted Substances List (RSL). Furthermore, the Group strictly complies with local and international regulations on on the procurement, importation, use and exportation of raw materials, such as the Convention on International Trade in Endangered Species (CITES).

      The Prada Group wants to set an example and serve as a catalyst for qualitative excellence as well as the promotion of a culture and modus operandi that tend to higher ethical models. In its relationship with suppliers, the Prada Group promotes and supports the respect for human rights and existing international laws concerning child and forced labour, regulations on workers’ health, safety and well being. 

      Besides encouraging social sensibility, it promotes knowledge of existing legislation and the adoption of the main environmental, social and quality certification, overseeing their application.

      The Group, thus, requires its suppliers to adopt responsible behaviour by undersigning its Code of Ethics, which establishes the mandatory principles on employees’ rights, working conditions, equal opportunities, freedom of association, health insurance and protection of the environment in the procurement of materials and the production activities.

      A system of procedures defines the ethical, technical and economic requirements that all the suppliers of the Group shall meet for the beginning and the continuation of a partnership with the Group. Specifically for ethical issues, documentation and certification provided by partners shall guarantee compliance with the law on remuneration, social security, taxation, health and safety, environment, privacy and governance model.

      This information is subject to periodic updates and systematic checks by the Prada Group in order to ensure veracity and consistency.

      Product quality and customer health and safety are central to the Prada Group's manufacturing processes.

      The products must meet uniform quality standards and satisfy all current regulations in the more than 70 countries where they are sold.
      To achieve these goals, the Group employs some 291 technicians, each with at least ten years’ experience, who run strict quality controls on every material used in the production process, from sourcing to the finishing touches. They make periodic visits to the manufacturing sites of suppliers to assess their processes, the quality of their goods and the general workplace conditions.
       
      In 2010 the Group formed a Committee whose task is to set the guidelines regarding all aspects of compliance with national and international legislation on the nature and proof of origin of raw materials, the creation of the finished product, and consumer health and safety in general.
       
      Within the scope of these control and guidance activities, since 2014 the Prada Group has drawn up and updated a Restricted Substances List ("RSL"), the procedure that sets limits on the presence of chemicals in its products. In 2016, Prada took the additional step of aligning its RSL limits with the more stringent, proactive approach outlined in the "Guidelines on ecotoxicological requirements for clothing, leather goods, footwear and accessories" endorsed by the Camera Nazionale della Moda Italiana (“CNMI”). These limits are the most virtuous in international practice and aim to ensure higher chemical safety standards than those prescribed by the strictest national and international laws.
       
      To ensure that the RSL is being followed, in addition to requiring certification and testing from every supplier, the Prada Group monitors observance of the guidelines and the supplier certifications through an additional internal control process by conducting spot checks on all sourced materials through accredited laboratories.

      The products of the Prada Group are manufactured in the 21 directly owned production sites, and through a wide network of independent contractors which are craft artisan workshops with extensive experience and a strong sense of tradition. Here, accompanied by qualified Group’s technicians, they produce samples and are involved in the production, starting from previously selected raw materials supplied by the Group together with all the technical specifications. 

      During the financial year ended December 31, 2017 the Prada Group worked with approximately 400 suppliers, 76% of which are located in Italy, 12% in the rest of the European Union and 12% in non-U.E. countries. 42% of the suppliers have been collaborating with the Group for more than 10 years and 22% for 5 to 10 years.

      The Group-owned production sites embody the highest expression of the manufacturing tradition of the Prada Group, as they harmonise the ability of preserving artisanal knowhow with cutting-edge industrial processes, geared to achieve and respect the quality and excellence of the production.

      The retail network is regularly studied and improved in order to make the stores more attractive to customers and the product displays more impressive.


      Over the years, the Group has expanded its distribution network and, at December 31, 2017, owns 625 Directly Operated Stores (DOS) in the most prestigious locations of the major international shopping destinations, consistent with the image, heritage and exclusivity of each brand. 


      This extensive network is a true asset for the Group as it showcases the new collections and represents a contact point with the customer.
      The stores serve as more than a primary sales function as they are also an important means of communication: they are the true ambassadors of the brand, conveying its image consistently and categorically, and providing services that protect the products’ quality and durability over time.


      The wholesale channel (department stores, multi-brand stores, franchisees and e-tailers) provides additional venues selected for their prestige of location and enables direct, immediate comparison with other brands. In recent years, the overhaul of this channel has been performed in keeping with the Group’s retail strategies and brand positioning.

      In addition, the Group's developments in the digital world have led to new partnerships with top electronic retailers ("e-tailers").

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