More ‘know-how’, less marketing, says Prada CEO
24/06/2016
In a report published at the end of May, Bain said sales of luxury goods, including high-end footwear, had reached €253 billion in 2015. It talked of a slowdown owing to a sluggish holiday season in the US, a drop-off in tourism in Europe, instability in the Middle East and economic uncertainty in China. It also said this had seeped into the first quarter of 2016 with only 1% growth, a trend that it expects to continue throughout this year.
Bain anticipates the personal luxury goods market will continue to experience “measured growth”, of 2%-3% until 2020, reaching an estimated €280-€295 billion in revenue by then. However, it has said clearly that this outcome is “heavily contingent” on continuous growth in China.
According to Bain, Chinese shoppers will make up almost 35% of global luxury consumers in the next four years, well ahead of US and European consumers. Recovery among mature market consumers, “due to luxury brands’ renewed efforts to regain consensus and trust”, will also help propel the market forward.
Among those who have given a reaction to this analysis are Prada chief executive, Patrizio Bertelli, and his counterpart at Valentino, Stefano Sassi.
In recent comments to business newspaper Il Sole 24 Ore, Patrizio Bertelli said that he views no crisis in the luxury market at the moment, but admitted that luxury goods brands had gone through a period of “euphoria” owing to fast growth in China that is now waning. “Since 2010, we have been putting too many products onto the market,” he said. “Now what we have to do is look again at our industrial model, with know-how as the starting point, not just marketing.”
For his part, Stefano Sassi told the newspaper that Valentino has decided to focus on “clear and well defined values” and on a strategy that the company has developed for itself, rather than try to adapt to general trends in the wider market.“We’ve had success with this,” he said, “and not just in China. There may be some tactical variations [for different markets], but we will continue along this path.”
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