FASHION QUOTE BY
MIUCCIA PRADA
2023 JULY ISSUE
Written by Andrew Sia
Illustrated by Elita Lam
Share this article!
From the Desk of the Publisher
Prada began in Italy in 1913 as a leather goods shop in Milan. It was founded by the two brothers, Mario and Martino Prada. During that time Mario Prada was traveling to the other parts of the world and brought back advanced materials for bags and trunks. For the inherence of the business, like all other fashion companies, the male heirs were preferred.
In the case of the Prada family, since the son wasn’t interested, they have to bring in the daughter Luisa, who brought her own daughter, Miuccia Prada, into the family business eventually.
The time was in 1977 when Miuccia met with Patrizio Bertelli, who became her husband in 1987. Prior to that, Miuccia introduced a backpack using a waterproof nylon fabric which made Prada became known internationally.
In 1987 a women’s ready-to-wear was introduced. In 1992, a high fashion brand Miu Miu was launched for the younger customers. Very soon it was operating 40 locations worldwide, and 20 of them were in Japan.
Patrizio Bertelli started the leverage with the luxury brands in Europe and because the gearing was too high that led the company into great loss. Even when it was listed finally in the Hong Kong Stock Exchange, the result failed to meet the market’s expectation.
Now Prada is planning to pass on the rein to the son, Lorenzo Bertelli, and he is learning the business from the company’s interim CEO, Andrea Guerra, who was hired from outside.
“What you wear in how you present yourself to the world, especially today, when human contacts are quick.
Fashion is instant language.”
– Miuccia Prada
Prada S.p.A. is an Italian luxury fashion house founded in 1913 in Milan by Mario Prada and his brother Martino. Together they are known as Fratelli Prada, the Prada Brothers.
It began as a leather goods shop in Milan and initially it also imported English steamer trunks and handbags. Mario was also importing crystal and silverware and from time to time he would bring back advanced materials for bags and trunks. The first shop has the sign read “Fratelli Prada” and it is located in the street covered by an arching glass and cast iron roof connecting Piazza de Duomo with Piazza della Scala.
The first Prada shop is inside the Galleria Vittorio Emanuele II, which is Italy’s oldest shopping gallery and a major landmark of Milan.
Mario Prada in the beginning didn’t want any female family members from entering the company. But ironically his son had no interest in the business and so it was his daughter Luisa who succeed Mario when he passed away in 1958. Luisa’s daughter, Miuccia Prada, joined the company in 1970, and eventually she took over from Luisa in 1978. Miuccia was by then only 28 years old. She graduated from University of Milan with the Doctor degree of political science which had nothing to do with fashion. But since Mario Prada passed away, Italy also started to lose those clientele who were looking for top quality products. It had made the operation very difficult.
Miuccia met Patrizio Bertelli in 1977, who had his own leather goods business at the age of 24. He joined the company and advised Miuccia on company business. Soon Miuccia followed the suggestion to stop importing English leather goods and started to change the existing luggage business.
Miuccia revived the business of Prada by introducing a backpack using materials that her grandpa imported from America—a waterproof nylon fabric known as Pocono—to produce backpacks and totes in 1979 for tracking and became the hottest items sought by customers from all over the world.
What followed was Miuccia opened a second boutique in the center of the Galleria Vittorio Emanuele in the heart of Milan in 1983. With the release of the nylon tote, Prada began with opening boutiques in prominent shopping districts in Florence, Paris, Madrid and New York City.
In the following years, every year Prada released something, like a shoe line, the “classic Prada handbag”, practical and sturdy with craftmanship that became Prada’s signature.
In 1987, Miuccia and Bertelli married and the following year they released a women’s ready-to-wear line.
In 1992, launched the high fashion brand Miu Miu, named after Miuccia’s nickname which catered to younger consumers and celebrities. In 1993, Prada was awarded the Council of Fashion Designers of America (CFDA) award for accessories.
The company owned eight factories and subcontracted work from 84 other manufacturers in Italy. It operated in 40 locations worldwide, 20 of which were in Japan.
In the 1990s, we heard about Prada’s leverage among the luxury brands in Europe, they were Gucci, Church & Company, Fendi, Jil Sander A.G., Helmut Lang, and these merging and acquisitions elevated Prada to the top of the luxury goods market in Europe and it revenue tripled to $90 million. These were all the speculations of Patrizio Bertelli but the company was still in debt.
Entered into 2000s, it had to slowdown its merging and acquisitions spree and in order to pay off debts of over $850 million, it planned for listing 30% of the company on Milan Stock Exchange in June 2001. It didn’t succeed as spending on luxury goods slowed down in the United States and Japan. That year Bertelli sold all of Prada’s 25.5% share in Fendi to LVMH for $295 million.
In 2006, more brands were sold—Helmut Lang, Jil Sanders, the Church & Company and few other brands—to reduce its debts.
On May 6, 2011, Hong Kong Stock Exchange was accused on approving Prada’s IPO during the Prada Gender Discrimination Case which Prada ultimately won. On June 24, 2011 Prada was listed on the Hong Kong Stock Exchange to raise $2.14 billion, but failed to meet the expectations of the market.
In my memory, Prada has always been very controversial and I can sum it up as something being very greedy. It could all be the fault of Patrizio Bertelli who was married into the Prada family with Miuccia Prada. It also appeared to me as the odd couple and I hope that I could be wrong and I ask you not to take my words as any opinion. Anyway, the company is a $1.6 billion company today who came from the sales of $40 million in 1990. But for a company who has been running as a 12-year public company, its return is only 3% and should have considered as being badly managed.
Coming to the end of the writeup about this article, we noticed that Miuccia Prada and Patrizio Bertelli are ready to handover the rein of the company to their next generation, the family heir Lorenzo Bertelli, who is 34 years old and will have to get ready first. During this interim period, Prada hired a reputable industry executive, Andrea Guerra, to be the chief executive.
And as almost all the founding families of listed luxury companies they tend to control the voting rights and minority shareholders will have little to say over how succession is handled. Unlike those tech giants, Bill Gates and Jeff Bezos, who handed the running of their companies to skilled industry executives.
The bosses of several big fashion companies are handing over their companies as they are all in their eighties. We read about Bernard Arnault’s LVMH, appointed his daughter Delphine as CEO of Christian Dior; Johann Rupert at Cartier, owned by Richemont; and Amancio Ortega of Inditex, Europe’s largest fast fashion company, who has appointed his daughter Marta Ortega Pérez to be the CEO.