Prada expects to join Richemont-Farfetch talks over online reconciliation


A logo of luxury goods company Prada is seen at the entrance of a store in Brussels, Belgium, July 2, 2021. REUTERS / Yves Herman

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  • Prada could invest in a joint online-exec platform project
  • Prada CEO announces he will hand over to son Lorenzo in 3-4 years
  • The Group has set a medium-term revenue target of 4.5 billion euros

MILAN, Nov. 18 (Reuters) – Italian fashion group Prada plans to join talks between Cartier owner Richemont (CFR.S) and online retailer Farfetch (FTCH.N) on the launch of a platform- common form of e-commerce with the aim of boosting online sales and increasing overall turnover by 40%.

Richemont said last week he was in advanced talks with Farfetch to sell him a minority stake in his online business Yoox Net-a-Porter (YNAP). He added that he would also invite other companies to participate in transforming YNAP into an industry-wide platform without a global controlling shareholder. Read more

Farfetch chief executive Jose Neves said during the company’s third quarter earnings call that luxury brands were still in negotiations. He could not provide a timeline on the transaction because “there is no guarantee that a transaction will be completed successfully.”

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“I think … that we will be invited to participate in the discussions,” said Lorenzo Bertelli, 33, group marketing director and son of CEO Patrizio Bertelli, during a presentation to investors in Milan.

“It’s premature and the storyline is still not clear enough to answer it, but we’re not saying ‘no’ a priori,” he said when asked if Prada could invest in the business.

Patrizio Bertelli, who with his wife and designer Miuccia Prada transformed a family brand into one of the world’s largest luxury groups and pledged to keep it independent, said he could hand over the reins to Lorenzo in the next three to four years. . Bertelli senior is 75 years old.

SALES OBJECTIVE

Unveiling Prada’s medium-term strategy, the couple said they were aiming for sales of 4.5 billion euros (5.1 billion euros), up from 3.2 billion euros in 2019, before the pandemic, and record sales of 3.6 billion euros in 2013.

The focus will be on moving Prada upscale and doubling the online share of retail sales to 15% – still below an industry average of around 20% but well above the level of 2% before the global health emergency.

The Hong Kong-listed group, known for its minimalist look, was in the midst of a strategic overhaul to revive sales when the crisis hit retailers around the world forcing them to temporarily close stores and deny them tourist shopping. .

He said on Thursday that retail sales in the three months leading up to September were up 18% from the same period in 2019, an acceleration from the 13% growth rate in the second quarter. Read more

He expects revenue to exceed 2019 levels this year after falling to € 2.4 billion in 2020.

In the medium term, it aims for an operating profit of 20% of total sales, more than double the level of 2019, a target that some analysts consider disappointing compared to brands like Gucci or Louis Vuitton.

Executives said Prada, less exposed to leather goods and higher margin handbags than its competitors, planned to invest in these product categories to increase its margins. “We believe these goals are not sub-ambitious, but reasonable and realistic,” said Alessandra Cozzani, group chief financial officer.

($ 1 = € 0.8807)

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Additional reporting by Arriana McLymore in New York. Editing by Keith Weir and Alistair Bell

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