Italian luxury fashion house Prada SpA (DE:PRP) has big dreams for the Chinese market in the mid-term despite the current challenges. CEO Gianfranco D’Attis unfolded his vision for China at the Pradasphere II exhibition held in Shanghai yesterday. He aims to double down Prada’s business in the world’s second-largest economy by increasing investments. D’Attis did not hint at opening more stores in China but said that there would be larger stores with more offerings and more local products.
Furthermore, he added that Prada aims to provide customers with quality experiences with more hospitality, events, and special capsules. D’Attis showcased a Prada-themed café offering premium Italian coffee and said there would be more such in the offing. He also said that adding localized products in China and elsewhere would ensure that customers get differentiated offerings everywhere they go, which would ensure that the company’s sales are not cannibalized.
Prada Trusts China’s Growth Story
Notably, China’s growth story has been hampered by the COVID-19 pandemic and the slow recovery after that. The country is hounded by economic challenges, and the demand for luxury goods has been diminishing. Even so, Prada is hopeful that China will regain momentum and expects demand to improve soon. Prada is planning to launch a hospitality concept across the stores by 2024-25, and China is surely one of the countries that will be hosting it.
Prada’s trust in China stems from the fact that the nation is expected to contribute roughly 40% of global luxury sales by 2030, per Bain’s research. Moreover, a solid performance from Asia and Europe helped Prada to report a 10% year-over-year sales growth in the Q3FY23 results.
Why Invest in Prada?
The Prada share price prediction of €6.26 implies 25.3% upside potential over the next twelve months. On TipRanks, PRP stock has a Moderate Buy consensus rating based on five Buys versus four Hold ratings. Year-to-date, Prada shares have lost 2.8%.
