Prada to 'rationalise' wholesale as it focuses on digital, seeks price uniformity

Prada has become the latest luxury group to plan to cut back its wholesale distribution as it seeks to create a unified image and uniform pricing for its high-end products.


Prada


The company said that it will rationalise its wholesale network in both its home market of Italy and in Europe as a whole. And the news follows its announcement back in March that it would stop offering end of season price cuts within its own boutique network as it works to protect the luxury image of the brand and reduce the level of markdowns overall.

In a Hong Kong Stock Exchange statement, the company said its board of directors, “having analysed in detail the structure of its wholesale channels and noted the growing complexity and fragmentation of the wholesale market, resolved on additional rationalisation of its network of independent partners.”

It didn’t go into detail about just what this would mean but Reuters reported that it will cut the number of wholesale partners it has. If that’s the case, it’s handbag and accessories business is likely to be most affected.

In the statement, the company added that “the Prada Group considers it essential to ensure greater consistency in pricing policies across retail and digital channels. This strategic review is intended to further strengthen the Prada Group brands with the aim of supporting sustainable long-term growth.” 

The history of the luxury sector in the past two decades has been about brands taking greater control over the distribution of their products, their image, and therefore their value. In some cases, this has become a complete strategic makeover such as the one that we’re seeing at Burberry at the moment.

At Prada meanwhile, the strategy isn't only about exiting some multibrand shops that might not be the right fit, but will also see the company replacing them with new digital and -e-commerce partners, according to some reports. 

Prada was a relative latecomer, to the digital sphere but has been acting fast to catch up and digital growth remains a key focus for the company.

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