Source : Sunday Times – 26 Jul 2009
It is hard to miss the gold-and-green damask facade of the Miu Miu store in brand new mall Ion Orchard.
Its towering glass panes contain a 2,800 sq ft interior, and scream ‘come in and buy something, especially an exclusive snakeskin bag that bears a ‘Miu Miu Singapore Limited Edition’ label’.
And that is exactly the intention of the Prada group, which is planning to open at least three Miu Miu standalone stores by the end of next year, including one with a three-storey facade in Paragon Shopping Centre.
Said the group’s newly appointed chief operating officer, Mr Sebastian Suhl: ‘We’re in advanced discussions with the Marina Bay Sands integrated resort (for another store) and we’re opening in Changi Terminal 2 by early 2010.
‘With the current developments making Singapore a very dynamic place, I’m sure this won’t be the end of it,’ he added.
Speaking to The Sunday Times in the freshly unveiled boutique last Tuesday, Mr Suhl said the group is focusing its expansion plans on Asia because ‘the numbers clearly demonstrate that Asia is booming’.
He declined to give specific figures, but said this year’s growth – in the double digits – remains ‘very strong and similar to last year’s, which is impressive considering the downturn’.
Asked why Prada is so bullish on Singapore, he said: ‘Singapore is a large market for us, numbers-wise. With all these new developments coming up, it will draw a lot of shoppers from the surrounding countries.
‘Singapore is going to give Hong Kong a run for its money, as a tourist market, a retail market and a luxury market. It’s a very refined place and it’s among the top markets here for us.’
To demonstrate its commitment to this belief, the group also made sure the new Miu Miu store here was among the first in the world – ahead of Hong Kong, even – to stock some of the season’s latest merchandise.
The group will also open a 14,000 sq ft Prada store in Ion in September. The double-storey boutique, which will feature a unique facade design and face Orchard Road, will be the largest Prada store in all of Asia – until the 18,000 sq ft one opens in Plaza 66 in Shanghai by the end of the year.
In fact, Ion Orchard represents a milestone of sorts for the group, as the mall is where it will also launch its other two brands, Car Shoe and Church’s, which are new to this market.
‘It’s rare for us to open all four brands in one mall at once,’ said Mr Suhl, who attributed some of this aggression to the recession.
‘Recessions present opportunities for those who have a vision and who have money to invest. For the Prada group, this is the time for us to get some amazing locations.
‘Our vision is to maintain our investment in new stores and infrastructure in the recession.’
By next year, the group could have 10 stores in Singapore – three for Miu Miu, four or five for Prada, and one each for Church’s and Car Shoe, said Mr Suhl.
He also denied that Miu Miu and Prada offered deep discounts this past sale season because business was bad.
‘Miu Miu and Prada in Singapore have been doing excellently. I can’t reveal numbers but the fact is we had a great season and relatively low stock levels. In fact, when we started the markdown, we were concerned that there wasn’t enough merchandise left in most categories to make targets.’
As a group, Mr Suhl said global sales are still ‘growing substantially in the double digits year-on-year’ – and have so far been ‘even better than expected in 2009 over 2008′.
Prada and Miu Miu will focus much of their expansion plans this year and the next in South Korea and China – which Mr Suhl termed ‘eternally developing markets’ – as well as in Japan, where Prada is ‘outperforming the market’ that has been reportedly battered in the recession.
The group is not resting on its laurels in Europe either, having just opened standalone stores in Athens, Istanbul, Madrid and London.
‘Our goal is to make retail 70 per cent of our overall sales, up from about 50 per cent last year. One of the ways to get there is by opening new stores; the other is to improve existing stores, which we’re continually working on.’
But there may be a stumbling block yet to Prada’s expansive ambitions: The planned initial public offering (IPO), which has been put off three times so far, appears set for another delay.
Prada considered an IPO in 2001 but this was derailed by market turbulence after the Sept 11 terrorist attacks. Since then, it has put off listing and turned instead to debt, which The Financial Times said was about 1.1 billion euros (S$2.25 billion) at the end of last year.
The paper also reported talks were under way between the firm and its creditors, led by Italian banks UniCredit and Intesa Sanpaolo, to reschedule the repayment of 350 million euros that matures in the summer of next year. Italian newspaper La Repubblica said Prada will now delay its IPO until 2012.
Mr Suhl declined to comment on these reports, but said: ‘It’s a no-brainer: You list when the time and conditions are right – otherwise, you don’t. I can’t tell you when it will happen. I don’t think anyone really knows. It’s just been bad luck, really, but the markets will guide us.’
He believes that Prada’s strengths in ‘prolific product development and innovation’ resulting in ‘balanced sales across each category’ will stand it in good stead.
The Prada group earned a net profit of 127 million euros in 2007, thanks to sales which rose 18.8 per cent on 2006 to reach 1.66 billion euros.
Revenue for the Prada brand alone was 1.3 billion euros in 2007, up 10 per cent on 2006. Miu Miu, no longer Prada’s ‘little sister brand’, saw sales surge 43 per cent to hit 233 million euros in 2007.
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