PARIS — That Asia-Pacific is the new frontier for luxury is not lost on Sebastian Suhl, Prada SpA’s recently appointed chief operating officer who spearheaded the group’s operations there for four years.
“Asia has been fantastic,” Suhl said. “It has offset some of the softer markets.”
Asia was Prada’s largest business in the first half of 2009, representing 25 percent of global sales, and according to a recent study by Bain, the region is set to grow 10 percent this year.
Prada on Wednesday unveiled a new 13,000-square-foot unit in Singapore’s Ion Orchard mall, its largest flagship in Asia-Pacific to date. The company plans five more stores in the region before the end of the year for a total of 17 new units in 2009.
Suhl explained Prada has seen very strong comps across the region, with men’s wear, which accounts for 30 percent of global Prada sales and more than 30 percent in Asia, leading the way.
“We have been seeing some very positive trends in men’s wear, and overall much more positive trends than women’s globally,” Suhl said.
China has been “remarkable,” while South Korea, which is Prada’s fastest-growing market in Asia year-to-date, has done “extremely well” for men and women, he added.
Prada is also looking at new territories such as Mongolia, although “it’s still very nascent,” Suhl said, adding that second-tier cities in China like Xi’An would remain the focus for the time being. “Xi’An is a city of eight million people, but by Chinese standards, it’s almost like a village. The sales we are generating there in a relatively small store are comparable to key European cities,” he said.
Even markets like Australia are starting to show big numbers, according to Suhl.
To further penetrate the market, Prada, which also operates the Miu Miu, Car Shoe and Church’s brands, plans to open its first Car Shoe retail footwear store next year in Hong Kong’s Elements Mall and in Singapore’s Ion Orchard. Meanwhile, Church’s, which already counts three stores in Hong Kong, will also open a store in Ion Orchard.
“Shopping is almost a cultural pursuit [in China]. Consumers there learn about Western culture by shopping and embrace top European luxury brands once they have understood that they have heritage,” said Suhl.
He attributed the Prada brand’s success to its wide product assortment; however, he underlined the importance of educating Asian consumers, citing the Prada Transformer art project in Seoul as an example.
“You can’t assume consumers know the brand. It’s our job to help them get to know it and educate them every day,” Suhl said.
Store locations are also key. “Like in every market, you have to distinguish between prime real estate and secondary real estate,” Suhl explained. “Along with our very best competitors, we’re getting the pick of the litter.”
While growth in Asia has buffered contracting sales in more developed markets, Suhl said he was beginning to see signs of a turnaround in the rest of the world in recent months.
“We expect to end the year [retailwise] with Prada possibly double-digit positive and like-for-like positive, which is very good in a year like this and against last year, which was quite strong,” he said. “Our strategy in investing in direct retail is paying off.”
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