Prada Expecting To Launch Joint Online Platform With Richemont And Farfetch

Italian luxury brand Prada is expecting to join Richemont and Farfetch in launching a joint eCommerce platform in hopes of boosting its sales and generating more revenue.

The announcement comes just a week after Richemont announced plans to sell a minority stake in Yoox Net-a-Porter (YNAP) to Farfetch. The company had also noted that it was in talks with other luxury brands to develop an industry-wide neutral platform.

The company’s chief executive Jose Neves, however, could not provide estimates for when the deals with other luxury brands will be finalized.

“There is no guarantee any deal will be successfully completed,” he said during the company’s third-quarter earnings call.

Prada, for one, is hopeful that the deal will help grow online sales and help it meet its goal of boosting its revenue by 40 percent.

“I think…we will be invited to participate in the discussions,” said Lorenzo Bertelli, who is the son of CEO Patrizio Bertelli and the brand’s marketing chief.

The Prada group’s interest in participating in the Richemont-Farfetch powered platform comes at a time the company is focussing on doubling the online share of its retail sales to 15 percent. While that is below the industry average of 20 percent, it is significantly higher than the 2 percent level before the start of the pandemic, Reuters reported.

This year, the company expects its revenue to grow past 2019 levels after they fell to €2.4 billion in 2020.

In the medium term, the company is reportedly targeting an operating profit of 20 percent of total sales, which will be more than twice the 2019 levels — a goal some analysts see as underwhelming, especially when compared to Prada’s competitors such as Gucci and Louis Vuitton.

“We think those targets are not under-ambitious but reasonable and realistic,” said Alessandra Cozzani, Prada’s finance chief.

Originally published at https://retailbum.com on November 19, 2021.