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The evolution of a luxury brand: the case of Prada

Christopher M. Moore Caledonian Business School, Glasgow Caledonian University,

Glasgow, UK, and

Stephen A. Doyle Department of Fashion, Marketing and Retailing, Glasgow Caledonian University, Glasgow, UK

Abstract

Purpose – The purpose of this paper is twofold. In its initial stages it undertakes a review of the key fashion industry-related themes emerging from the IJRDM. Subsequently, it reflects upon these themes in the context of luxury fashion brand Prada and in so doing identifies four key change phases in the evolution of the brand.

Design/methodology/approach – Review of literature spanning 20 years.

Findings – The paper identifies five overarching general themes. These comprise fashion retailer brands, the internationalisation of fashion retailing, the emergence and challenges of on-line fashion retailing, changes in the supply chain and changes in consumption.

Originality/value – The paper provides a valuable overview of the main research themes within the context of fashion retailing. In addition, it provides a critical insight into the changing nature of Italian luxury fashion brand Prada.

Keywords Fashion, Marketing, Brand-management, Luxury, Growth

Paper type Case study

Introduction European research in the area of fashion marketing and retailing is a relatively recent activity and significant research pace in the area extends back no more than 20 years. That does not discount previous studies as unimportant. Indeed, the work by Lualajainen (1991, 1992) on Hennes and Mauritz and Louis Vuitton contributed much to our understanding of the international market expansion of what have become global fashion retailers. Similarly, Treadgold (1990, 1991) provided invaluable insights into the increasing shift towards internationalisation of retailers in general and in particular the internationalisation and philosophy of Laura Ashley and the impact that this had upon the company’s foreign market entry methods. Yet, while these major fashion retailers were considered, the focus of these studies was precipitated more by an analysis of international strategic development rather than the specific nature, form and experience of particular fashion companies.

While European fashion retailing research pre-the early 1990s was barren, it was significantly more advanced in the USA. Emerging often from researchers based within consumer science departments or food/agricultural/textile science faculties, these studies were dominated by consumer choice/consumer behaviour considerations and quantitative methodologies reliant upon college student samples. Crucially, American researchers’ define, describe and categorise fashion as apparel and the majority continue to do so. In contrast, European research used clothing, then fashion as the collective

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International Journal of Retail & Distribution Management

Vol. 38 No. 11/12, 2010 pp. 915-927

q Emerald Group Publishing Limited 0959-0552

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term. It could be argued that this distinction is not accidental. The difference marks a distinction in the way that fashion is “played out” within the American and European retailing markets. Apparel indicates and represents a functional viewpoint that understands the sector objectively – driven by interests in product performance, manufacturing processes and merchandising techniques. And 20 years ago, functionality was largely the principal characteristic of the American clothing sector. For it could be argued that the fashion retailer as “brand” – per se – is a relatively recent phenomenon in the mass market of the USA fashion sector. It has only been with the loosening of the strangle-hold of department stores on clothing distribution and the emergence and success of brand-led fashion retailers – such as The Gap, Abercrombie and Fitch and Victoria’s Secrets that the fashion retailer as a brand has had any relevance in the USA. Consequently, consideration of the American fashion retailer as a brand in its own right is a relatively recent phenomenon and this is reflected in a literature that little account either of the business models of fashion retailers in the USA, or of the role that its own-brands play in the securing of competitor advantage.

From the early 1990s, the literature began to consider the nature, form, structure and activities of fashion retailers within Europe. This emergence is inextricably linked to the supportive contribution of the International Journal of Retail & Distribution Management (IJRDM) and in particular the advocacy of the journal’s editor, Professor John Fernie. The journal is not exclusively European in its perspective, but it has provided a distinctive platform that reflects the European fashion retailing situation. Reviewing the fashion retailing related IJRDM articles in the past two decades; it is possible to identify five research themes that have dominated thinking and debate in the area. These are as follows.

1. The fashion retailer as brand: the fashion brand as retailer Perhaps marking the most distinctive feature of the European fashion retailing sector, the brand has emerged as a pre-eminent strategic communications device to signal the values, positioning and identity of the retailer and its products. The literature has explored these issues in a number of ways in the journal, such as on a case study basis. For example, Vignali et al. (1993) work on Benetton, Lea-Greenwood’s (1993) review of River Island and Moore and Birtwistle’s (2004, 2005) evaluation of the business models of luxury fashion retailers Burberry and Gucci. Alternatively, survey-based approaches, such as that by Moore (1995) have sought to delineate more broadly the features of fashion retailers’ branding strategies. What is common to all of these studies is the realisation that fashion retailers, especially within Europe, have assumed the brand creation, development and distribution roles. This direct involvement has provided direct control over design, distribution, communications and pricing. The benefits of this involvement have been well identified elsewhere (Fernie et al., 2003) but pre-eminent among these are those relevant to securing brand exclusivity and the attendant advantages of customer loyalty.

2. The internationalisation of fashion retailing: globalising the fashion branding Fashion retailers are among the most international of companies (Moore et al., 2010). The IJFDM output in the past two decades has tended to focus upon two specific stands. The first is the role of the brand in supporting foreign market growth (Wigley et al., 2005). This is particularly evident in fashion retailer cases studies, such as Per Una in Taiwan

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(Wigley and Chiang, 2009); the now defunct childrenswear brand Adams in Spain ( Johnson and Allen, 1994); the expansion of Debenhams in the Middle East ( Jones, 2003) and Marks and Spencer in Hong Kong ( Jackson and Sparks, 2005). The influence of the brand to consumer perceptions of internationalising retailers’ market entry is also recognised in very recent studies (Alexander et al., 2010). The second strand is concerned with retail market structures in places such as India (Halepete and Seshadri Iyer, 2008); Spain (Gold and Woodliffe, 2000); Korea (Choi and Park, 2006), Brazil (Alexander and de Lira e Silva, 2002) and in particular the features of the fashion retailing environment in these markets.

3. E-fashion: style on-line Online fashion specialists, such as Net-a-Porter and ASOS have provided compelling evidence through its growth and profitability that fashion is not excluded from online opportunities. Furthermore, the fashion retailers, Top Shop, All Saints and Gant have been able to combine a strong retail and online presence to generate significant brand growth opportunities. Despite the significant growth of online fashion selling, the literature remains under-developed in this area. Murphy (1998) and Marciniak and Bruce (2004) provided an early analysis of the fashion e-commerce and noted the tentative development of a web presence by European fashion brands; while Ashworth et al. (2006) considered the means of securing online advantage within the lingerie sector. With respect to the fashion retailers’ perspective, the lJRDM has remained largely silent since then. Greater attention has been given to the behavioural dimensions to the online fashion shopping (Newman and Foxall, 2003); considering the impact of technological advances (Kim and Forsythe, 2007), consumption behaviour across distribution channels (Goldsmith and Flynn, 2005) and connected to the latter, the significance of brand trust upon shopping behaviour (Hahn and Kim, 2009). Opportunities for retailers to use the internet as a means of customer segmentation via customization have recently been considered by Cho and Fiorito (2009). Yet, despite the fast pace of e-fashion sales growth, fashion e-tailing has been under-represented in the literature and there is significant opportunity for investigation from both a corporate and consumer perspective.

4. A new fashion supply chain: cheaper, better, faster The fashion supply chain has undergone seismic change in the past generation. Previously, fashion supply chains were characterised by its inflexibility, a dependence upon long term predictions and commitments and a tendency to source from specific locations over long time periods. One Spanish fashion conglomerate has done much to change old strategies. Inditex, and specifically its most financially important fascia, Zara, has at the very least altered perceptions of how a modern fashion supply chain should be configured. As a vertically integrated business, Zara’s control over the design to retail cycle has provided the critical advantage of speed. Where previously, the trends of high fashion took at least six months to percolate to the high street, now Zara can service a high-street interpretation within six weeks.

5. Fashion consumption trends: with brand, therefore I am While there has long been an intrinsic understanding that fashion brand choices are used a means of self-definition, self-demarcation and self-communication the intensity of

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competition and increase in availability has created a more fashion aware and informed group of consumers. In respect of this, the role of fashion style and brand choices as coded identifiers (McCracken and Roth, 1989) has similarly intensified. Significantly, Wigley et al. (2005) highlighted the relationship between brands and consumers as being based upon mutuality of perceptions whereby the brand and the consumer have synergistic characteristics. This highlights the need for brand to develop and manage what may be termed a consistent, appropriate and desirable “back-story” to which the consumer can ally themselves and interpret within the context of its own identity. Woodruff-Burton (1998) stressed the constructed nature of the self from a post-modernist perspective, indicating that how consumers represent themselves is through an amalgam of “selected and edited cues, comprising amongst other dimensions fashion brands”. In respect of this, there is therefore clear alignment between this view of the consumer and fashion brands as entities that are created, managed and sustained through an array of tangible and intangible devices. Bakewell and Mitchell (2003) and Bakewell et al. (2006) delineate the generational and gender challenges for fashion companies in its studies of generation Y consumers. Not only do these studies support the basic premise that consumers engage and utilise brands to for both private and public reasons, but they also serve to stress the complex role of fashion brands in communicating dimensions such as attractiveness, seriousness, status and success.

In undertaking this review of the literature spanning two decades and demarcating the key, over-arching themes that emerge the significance and influence of the IJRDM as a venue for fashion retailing research becomes evident in terms of breadth and depth. In addition, it establishes a valid framework for the consideration of fashion brand marketing and management that is simultaneously historical and contemporary and as such facilitates an evolutionary review of fashion brands from its early stages through to present day. In respect of this, revisiting the fashion related research that has comprised the IJRDM provides an insight, both historic and contemporary, into the nature and influences of change manifest within the sector. Reflecting upon this changing fashion landscape and its impact upon the organisations that comprise it, the subsequent section of this paper will analyse Italian, luxury, fashion brand Prada and the change stages that characterise its evolutionary phases.

Prada: then and now Established in Milan in 1931 by Mario Prada, Fratelli Prada (as the business was originally named) immediately claimed a premium market positioning in the Italian accessories market. This was achieved in two ways. First, the company opened its first boutique in the Galleria Vittorio Emanuele shopping arcade. The arcade, named after the first king of the unified Italy, connects the Piazza del Duomo with the Piazza della Scalla, which sits as the foreground to the city’s famous Opera House. Since its opening in 1877, the Galleria has been inextricably linked to premium retailing. While in more recent times the space has become an important Milanese tourist attraction and also home to some fast foods chains; luxury brands, including Louis Vuitton, Tods, Gucci and Prada still retain a highly visible presence there. Second, Fratelli Prada’s product focus of leather travel accessories was from its inception, targeted to match the lifestyle needs of the elite consumer. This link with the higher echelon was formally recognised by Italian royalty, when Fratelli Prada was designated an official supplier to the Royal Household. This gave Prada the right to incorporate both the coat of arms and the knotted rope

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insignia of the House of Savoy into its trademark logo. These emblems remain part of the Prada brand livery (Prada, 2009).

Both Fratelli Prada and that other great Italian luxury accessories firm, Gucci, shared some similarities but exhibit some striking differences. Both were founded within ten years of each other (Gucci in 1921) and both within two important commercial and travel destinations (Gucci in Florence) and each focused upon accessories for a customer segment made rich by commerce and for whom impressive travel accessories were of importance. But three important differences distinguish its business approach over the next 50 years.

First, Gucci identified the power of celebrity for brand status enhancement by being associated with the greatest American and Italian movie stars of the 1940s onwards. Prada’s image was more sedate than celebrity.

Second, buoyed by the demand generated by its celebrity status, Gucci engaged in an aggressive international expansion, focusing upon important cities including Philadelphia, San Francisco, New York, Beverly Hills, Chicago and London. In contrast, Prada remained largely a domestic business.

Finally, while Gucci engaged in a prolific brand extension strategy through many, varied licensing agreements (which by the beginning of the 1980s had almost ruined its brand status), Prada did not.

By the early 1980s, Prada was a business that was little known outside of Italy. With its reliance upon imported finished goods, largely from England, Prada’s product range was indistinguishable and a distinct brand identity was indiscernible. The literature on fashion brand revitalisation has recognised the importance of individual(s) whose vision and creativity brings about a transformation of the brand’s status and success (Moore and Birtwistle (2005) on the impact of Tom Ford at Gucci). For Prada, that transforming individual was the founder’s granddaughter, Miuccia who took over the company in 1978 from her mother.

The four phases of change Reviewing the Prada business model under Miuccia’s 30 years of leadership, it is possible to identify four distinct phases of the brand’s evolution. These phases are delineated in Table I and explored thereafter.

Phase 1: the search for a differential When Miuccia Prada took over the business, it is claimed that she was a reluctant heiress of this somewhat moribund business. However, with the support of her partner (who subsequently became her husband), Patrizio Bertelli, the two recognised the need to secure a distinction for the brand. With a highly localised distribution network, dependence upon third party products and with no recognisable design signature, she recognised the need to offer a radical and different proposition within the luxury goods sector.

Phase Title

1 Search for a differential 2 Establishing a growth platform 3 Aspiration and acquisition 4 Retrenchment and consolidation

Table I. The four phases of

prada’s brand evolution

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Bertelli’s family business was also in the leather accessories market and through the integration of his production capability and Miuccia’s creative expertise; the groundwork for the creation of an international luxury Group was set (Prada, 2009).

In the early 1980s Miuccia began work on an utilitarian collection luggage collection that was stark yet technically advanced. Totes, holdalls and backpacks made from industrial black nylon cloth were developed and these were branded clearly but discretely. The black triangle shape of the Prada insignia placed against the black of the nylon provided an understated but potent branding device. These new products, distinct both in its design and branding, were a startling counterpoint to the logo-branding excesses and the ostentations product designs that dominated the luxury market at the time. Furthermore, in promotion of the range, Miuccia drew from her academic background (she has a PhD in Political Science) to claim an almost philosophical tone for the brand, placing it as an intelligent and discerning alternative to the vacuous excesses of competing businesses (Craven, 2008). As such, the brand was pitched to attract the cognoscenti rather than the celebrity-pack. By 1984/1985, her hardwearing, subtly branded nylon bags had generated not only significant demand, but also fashion credibility.

Miuccia Prada’s utilitarianism, combined with an ethos of sophistication, technical competence and controlled extravagance provided Prada with a differential in the crowded luxury goods sector. This is explained by Bertelli: “To be Prada is to be perfect in every way. The process of making a contemporary product demands a new level of commitment to both handicraft and technology” (Prada, 2009, p. 90).

Phase 2: establishing the growth platform Having developed a new, modern and highly distinctive accessories collection, Miuccia in collaboration with her husband, Bertelli, sought to put in place the elements critical for the future international development of the Prada brand. The starting point was to secure wholesale accounts within the leading department stores and fashion boutiques in the USA and Europe. This provided an opportunity to establish brand interest and awareness at minimal cost and risk.

The next step was the creation of a new store design – one distinctly different in terms of identity and feel from the Prada store in the Galleria Vittorio Emanuele. Designed by the renowned architect Roberto Baciocchi and opened in 1983 at the Via della Spiga in Milan, this store became known as The Green Store, by virtue of its distinctive pale green colour scheme. Sleek, austere yet sophisticated, the Green Store provided a blueprint for the opening of an international network of Prada stores. Reminiscent of Hollander’s (1970) “New York. London, Paris syndrome”, the company opened a fleet of “Prada Green” stores beginning in the New York in 1986, followed by Paris, Madrid and London. A domestic store network was also established; the first opening in Florence.

Yet, while the company developed its international store network based upon the “Prada Green” concept, there was also recognition of its need to retain an individuality and distinct character. Over the past 20 years the company has developed a particular perspective on retail space which the company expressed in a series of maxims in 2009 as follows:

(1) Variety among stores: “Shops should not be identical”.

(2) A variety of spaces: “Prada can be big in small spaces. Nike can only be big in large spaces”.

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(3) “Space is a marketing tool”. A brand can convey a sense of exclusivity by the perception of its store in the host country.

(4) “60 per cent of a business identity remains constant, while 40 per cent changes continually”.

(5) The introduction of non-commercial typologies, “Cultural events could be hosted in stores [. . .] Activities other than shopping could take place after store hours” (Prada, 2009).

With strong customer demand established by the wholesale and retail network, Prada recognised the opportunities to be had from extending the product range. Furthermore, its new stores required additional product lines to fill the spaces. A womenswear line, designed by Miuccia, was launched in 1988. The design handwriting of the womenswear collection was consistent with the luggage and accessories lines. With a limited colour palette and an emphasis upon the simplicity of the form, the range was distinctive for its juxstaposition of fabrics and textures. The unexpected coupling of fabrics highlighted the technical capability of the business and provided a justification for the high prices.

With its own factories and a large network of third party suppliers based across Italy, Prada was able to extend its brand presence into adjacent product categories with relative speed and ease.

In the five years after the launch of the womenswear line, the Prada brand was extended to shoes, fashion accessories and menswear. By 1992, the company sought to extend the coverage of its business through the launch of Miu Miu as a diffusion brand. Named after Miuccia’s nickname, the second line – comprised of ready-to-wear, leather accessories and shoes, was targeted at a younger, fashion-forward female customer. Less expensive than the mainline collection and with a more vibrant colour identity, the business replicated a similar development strategy as was adopted for the Prada brand. Leading fashion stockists were recruited as wholesale stockists and an international retail network of stores was rolled-out.

The push for growth was given further pace in 1997 with the launch of the Linea Rossa (Red Line) collection. Ostensibly a leisure and sportswear line, Linea Rossa (the premium line of the Prada Sport range) provided a showcase for Prada to showcase its technical dexterity through the use of advanced performance fabrics created through complex production techniques. This range, sold within Prada mainline stores, provided a vehicle for the business to engage in sports participation and sponsorship, specifically in the area of competitive sailing. By the end of the 1990s, Prada had transformed from being a marginal, domestic and small-scale firm to a multi-national, multi-segment business with a reputation as a leading influence upon fashion trends and consumer taste. This transformation gave the business confidence and appetite to enter a further phase of development – one driven by the aspiration to become a global luxury conglomerate.

Third phase: aspiration and acquisition An early indicator of Prada’s ambitions was evidenced in its acquisition of just over 9 per cent of Gucci shares in the summer of 1998. The company had no intention of securing a control of Gucci but instead was participating in a defiant alliance with the mighty Louis Vuitton Moet Hennessey (LVMH) group in the latter firm’s attempt to secure Gucci. Prada sold its shares to LVMH the following January at a profit exceeding

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$100 million (Weisman, 1999; The M&A Journal, 2002). Yet, while the LVMH aspirations to secure the Gucci brand ultimately proved unsuccessful, this did not stop Prada and LVMH collaborating once more in a luxury brand alliance. In October 1999, Prada joined forces with LVMH (Menkes, 1999) to purchase a 51 per cent stake in Fendi, with the Fendi family retaining the other 49 per cent. The Rome-based luxury goods company had originally been an acquisition target of the Gucci Group. However, the Prada/LVMH joint bid put paid to that aspiration. Subsequently, again Prada sold its 25.5 per cent Fendi share stake to LVMH in November 2001 to give the French conglomerate full ownership control (New York Times, 2001; LVMH Annual Report, 2002).

In parallel with these acquisition developments, Prada, perhaps encouraged by the conglomerate development activities of its near rivals, Gucci, as well as its allies at LVMH, sought to develop its own multi-brand strategy to enhance, support and compliment the Prada and Miu Miu brands. A first independent acquisition was a 51 per cent stake in the New York based Helmut Lang brand in March 1999. The rational for this purchase – which was increased to 100 per cent in 2004, was unclear. The brand was small and relatively unknown. And while it was known for its use of high-tech fabrics and complex designs, the value that it would bring to Prada was unclear. And while Lang was recognised as a talented designer, other than the benefits available from common sourcing and production, the Helmut Lang business was insufficient to provide Prada with any meaningful protection from the vagaries of consumer taste. Further, relations between Lang and Prada were strained from the beginning and within five years, he had left the company. This purchase was then followed by its securing of a 75 per cent stake in August 1999 in the Jil Sander brand (Goldstein, 1999). The New York Times reported that the acquisition would provide Prada with a stronger foothold within the German market ( Jil Sander was born in Northern Germany) and would provide an opportunity to combine stores. Perhaps most importantly, it provided access to the design and creative talent of the brand’s founder. However, in many respects, the features of Sander’s design character were very similar to that of Miuccia Prada. Both were defined by an austerity and purity and each focused upon the use of premium fabrics. If the House of Prada hoped to leverage Jil Sander’s design talent, then its hopes were short-lived. Internal disputes between the designer and Bertelli resulted in her resignation in four months after Prada’s acquisition. The relationship between Sander and Bertelli improved sufficiently for her to return to the role of Creative Director in May 2003. Her return was short-lived however, and she left the business for a second time in November 2004.

While Prada’s acquisition of fashion design brands did not prove successful, its purchase of renowned shoe brands proved more successful. In addition to its purchase of the upmarket Italian brand, The Car Shoe Company, Prada also secured ownership of English shoe company, Church for £106 m in September 1999 (News.bbc.co.uk, 1999). These acquisitions perhaps made more strategic sense. Both companies were well established, enjoyed an excellent reputation for quality and were not linked to the machinations of any particular creative director. Arguably, given the importance of shoes to the Prada business, these two acquisitions provided access to complimentary design, technical and production skill set that would serve only to enhance the Prada core shoes business. Furthermore, it also allowed for a spreading of market risk across two other brand territories.

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As an international company, operating an ever-expanding network of stores, Prada faced an important challenge. It recognised that store expansion inevitably results in predictable duplication and that this undermines any claim of brand creativity. This form of incremental expansion, the company recognised, could “reduces (brand) aura and contributes to a sense of familiarity” (Prada, 2009, p. 420). More positively, the company realised that expansion may also provide for a redefining of the brand and produces the opportunity to introduce two kinds of stores: “the typical and the unique”. Its unique store concept, they named the Epicentre store. Its function, according to Prada was to “become a device that renews the brand by counteracting and destabilizing any received notion of what Prada is, does, or will become” (Prada, 2009, p. 421).

The first Epicentre commission was given to the renowned Architect Rem Koolhaas, of the office of metropolitan architecture (OMA). Prada commissioned Koolhaas to review trends in global shopping, provide new concepts of new retail tools and apply these to new kinds of stores. A total of three stores were created to be distinct from the “Green Store” typology. These Epicentres were to serve as a laboratory for experimental shopping experiences, through the application of emerging technology, and the promotion of the retail space as a civic meeting space that would contribute to the cultural landscape of the location through the hosting of concerts, exhibitions and other public events (Prada, 2009, pp. 420). The first of the epicentre stores was set in a former Guggenheim museum space in New York’s Soho district in December 2001. The estimates for the development costs associated with this store (and the two others that followed), have varied widely. Marcus Field, reporting for the London Evening Standard proposed one of the more conservative levels at $40 million. In 2003, the second store, designed by Swiss architects Herzog and de Meuron opened in Tokyo: probably Prada’s most important market in terms of revenue. The six floor building, with a green glass façade, includes retail selling space, lounges and public event space. The third and last thus far of the Epicentre stores was opened the following year in Los Angeles. OMA were once again commissioned to design the store on Rodeo Drive, Berverly Hills. One of the most distinctive features of this store is that the storefront is completely open. An air curtain provides a climate control since the space open directly on to the street. Without question, the Prada Epicentre stores have contributed significantly to advancing thinking with respect to retail store design. With the direction of some of the world’s most influential architectural practices, the Epicentres have – once more – set Prada against the luxury mainstream. These are intellectual stores; sophisticated, potent and possibility ahead of its time. However, in the decade since the first Epicentre was opened, many of the technological inventions pioneered in these stores have been abandoned and viewed as unworkable. Furthermore, these have architectural experiments, like the firms acquired by Prada, have placed a significant debt burden on the company. It is somewhat ironic that the initiatives devised to support the growth of Prada have had a detrimental impact upon its corporate progress. Consequently, since 2005, the company has entered a radical retrenchment and consolidation phase.

Phase 4: prada in retreat – retrenchment and consolidation Having sought to establish a luxury brand conglomerate in the late 1990s, the inability of Prada to secure commercial success for its highest profile acquisitions required that they radically tidy-up its balance sheet by off-loading its non-profit making businesses. Initially, a 45 per cent stake in Church shoes was sold to private equity fund Equinox in April 2003. But more radical action was required to reduce company debt.

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In early 2006, Prada sold the Jil Sander business to British equity firm Change Capital Partners. While, some three weeks later, it was announced that the Helmut Lang brand would be sold to Japanese company, Link Theory Holdings after six years of consecutive losses at Helmut Lang.

As a means of reducing the debt directly, a 5 per cent stake in Prada was sold to Banca Intesa for e100 million in December 2006 (Financial Times, 2007). The extent of the financial challenge brought about by these unsuccessful acquisitions and the exuberant Epicentre store developments was clearly evidenced when, by the end of 2008, the company faced a net debt in excess of e1.1 billion.

As Prada has sought to recover from the crippling impact of the debt, it has focused upon protecting, maintaining and developing its core businesses. With the buy-back of the stake in Church shares two years after its initial partial sale, the company has invested in its core Prada, Miu Miu and Church brands. As a relative late comer to the lucrative fragrance market (its first ladies fragrance was not launched until late 2004 and developed in partnership with the Spanish fragrance house, Puig), the company has significantly extended its participation in this market through development of fragrances for men and women, as well as from the launch of cosmetics and skincare ranges. When the perfume range was launched, Miuccia Prada told The Times newspaper that she had resisted launching a perfume for a decade because of her aversion to mass marketing – “That requires mass banality”, she said (TheTimes, 2005).

Exploiting the potential of a strategic brand alliance for the first time, the company collaborated with LG to launch the Prada mobile phone. Within the first year of launch, more than one million units were sold; providing Prada with a lucrative and much needed revenue from the license agreement (Newsweek, 2009).

In many respects, Prada, the luxury brand, that had sought to distinguish itself from the luxury pack, by being almost anti-fashion within its nylon products, and anti-marketing with its discrete and subtle branding, has had to embrace the essential ingredient of the “mainstream” luxury business model. In order to finance design creativity, to support the international distribution network and to make possible the extravagant store experiences, most luxury brands must engage in some form of product democratisation. Product democratisation: a process whereby the brand is made more widely accessible through the provision of cheaper goods such as perfumes, sunglasses and fashion accessories, is undoubtedly the sustaining lifeblood of luxury fashion. For Prada, with a significant debt burden still in place and the possibility of an imminent IPO in doubt as a result of the recession, the adoption of more mainstream luxury marketing activities is inevitable if the company is to retain its presence in 78 countries and 7,000 employees (Prada, 2009).

Concluding comments As the review of the main themes of the fashion retailing literature demonstrate and the analysis of Prada’s evolution from a single store business to a major global brand indicate, the “system” of fashion retailing has become complex in response to changing consumer tastes, an extended competition base and advances in marketing technology. While the past 20 years of the IJRDM have provided a much needed platform for the dissemination of thinking with respect to the condition of contemporary fashion retailing, there is still a significant need for more close-case analysis of the strategic development of the world’s most important fashion retailers.

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