Miuccia Prada earned 9.7 million euros, or $12.7 million, and her husband and Prada chief executive Patrizio Bertelli pocketed 10 million euros, or $13.1 million, for their work last year, making them two of the highest paid people in fashion.
Those are just two of the details in a 450-page filing that was released Friday via the Hong Kong Stock Exchange Web site. The exhaustive document ushers in a new era of full disclosure for the privately held Italian house, which is finally carrying out its long-awaited IPO this month. The road show kicks off Monday in Singapore, followed by Hong Kong, London, Milan and then New York.
As reported, Prada is expected to sell 16.5 percent of its share capital in an IPO that could value the entire group at 10.7 billion euros, or $15 billion.
The proceeds from the stock market listing will help Prada embark on an aggressive store opening program, with a clear focus on Asia. In the document, Prada said it plans to open about 80 directly operated stores this year, of which 25 will be in Asia. Currently the company has 319 boutiques worldwide, plus 33 franchised stores.
A Prada spokesman declined to comment on the filing.
While Miuccia Prada and Bertelli’s earnings are around the 10 million euro mark, for comparison’s sake, LVMH Moët Hennessy Louis Vuitton chairman and chief executive Bernard Arnault earned a compensation package worth about 4 million euros, or $5.2 million, in 2010. PPR chief Francois-Henri Pinault earned 2.83 million euros, $3.7 million, for the same year. Currency conversions were made at average exchange rates for the year.
The document states that Bertelli and Miuccia Prada each own 33.2 percent stakes in Prada SpA through various holding companies. Miuccia Prada’s siblings Alberto Prada Bianchi and Marina Prada Bianchi each control 14.2 percent of the company. Intesa San Paolo owns 5.1 percent.
The filing also sheds light on Miuccia Prada and Bertelli’s contracts. It states that Miuccia Prada’s current five-year “consultancy agreement” runs through January of next year and that there is a cap on her future remuneration. Her salary will not exceed 9 million euros for the current fiscal year ending next January and 10 million euros for the following two years.
Similarly, Bertelli’s contract in the form of a “consultancy agreement” runs over the same time frame. He earned 6 million euros, or $7.9 million, plus a 4 million euro, or $5.2 million, bonus for the year ending Jan. 31, 2011. His salary has been capped at 9 million euros for the current year and at 10 million euros for the subsequent two years.
In the document, the company said its goals beyond opening more stores include bolstering its global coverage, “capture the high growth potential of Miu Miu,” and improve margins and profits.
Much like an IPO prospectus, the document outlined a series of “risk factors” for the business. These include the overall health of the global economy; the emergence of fast-fashion brands and their impact on the speeding up of the fashion development cycle; exposure to exchange rate fluctuations; the proliferation of counterfeit products; the seasonality of its business, and the earthquake and tsunami in Japan this past March, which will impact the group’s operations in that country.
The risk factors section also highlights the importance of Miuccia Prada, age 63, and Bertelli, 65, to the business. “Should either Ms. Miuccia Prada or Mr. Patrizio Bertelli reduce or cease her or his involvement with us, this could have an adverse effect on our business and results of operations,” the document said.
In the document, Prada said it expects its consolidated profit for the six months ended July 31 to come in at about 150.7 million euros, or $217.6 million at current exchange.
Prada reiterated its full-year results for the year ended Jan. 31. Net income more than doubled to 253.6 million euros, or $336 million, and sales rose 31.1 percent to 2.05 billion euros, or $2.75 billion. It also disclosed Friday that like-for-like sales increased by about 22 percent.
About 71 percent of the business comes via the retail channel, while wholesale sales generate close to 30 percent. The Prada brand has the most stores, with 207, followed by Miu Miu with 71. Prada said it had about 1,400 wholesale clients as of Jan. 31, 2011, the same as the year before but down from 1,800 in 2009. Europe accounts for about 42 percent of revenues; North America, 14.6 percent; Asia Pacific, 32 percent, and Japan, 11 percent.
Leather goods are the largest revenue generator, accounting for 50 percent of turnover. Ready-to-wear makes up 24 percent and footwear about 25 percent.
There is a breakdown by brand for the year ended last January. Prada generated the bulk of the revenue with 1.61 billion euros, or $2.1 billion. Miu Miu registered sales of 354.5 million euros, or $475 million. Church’s generated 53.1 million euros, $71.1 million, and Car Shoe generated 17.9 million euros, or $23.9 million. All the brands are profitable from an EBITDA standpoint except Car Shoe, which registered a loss for the past two years.
The filing revealed the company spent 85.1 million euros, or $114 million, on advertising and promotion purposes for the last fiscal year, equivalent to 4.2 percent of revenue.
Prada said its e-commerce retail channel generated about 1.9 million euros, or $2.5 million, in its last fiscal year. Prada.com operates in Europe, the United States and Japan and plans to launch in China soon. The group owns 11 factories, 10 of which are in Italy and one in the U.K. producing Church’s footwear. The factories make the majority of the prototypes, samples and “a portion” of the finished products, while the company outsources the rest of production.
Elsewhere in the document, Prada detailed its backing for the nonprofit Prada Foundation founded by Miuccia Prada and Bertelli. The company contributed about 2.4 million euros in 2009 and 2010 and about 1.8 million euros last year. It expects to contribute about 2.7 million euros, or $3.9 million, this year.
“These collections continue to build on that vision, empowering differently abled adults to express themselves through fashion,” said @tommyhilfiger of his line of adaptive apparel, which launches today. The line consists of 37 men’s and 34 women’s styles based upon the pieces from the spring Tommy Hilfiger sportswear collection. #wwdnews
“Stranger Things” is getting a new cast member for season 2. Meet @sadiesink_, the 15-year-old who will be joining the Netflix series for its new season. You may recognize her from “The Glass Castle” with Brie Larson and Woody Harrelson, but the Texas native’s next role goes in an entirely different direction. She describes her character, Max, as “a rough and tumble skater girl [who] becomes friends with the boys at school.” The second season debuts on October 27. (📷: @jgreenery) #wwdeye
Amid the Harvey Weinstein controversy, there’s another sector that’s being put under the spotlight for sexual abuse: the modeling industry. While rumors about abuse and sexual harassment of female and male models — and the photographers, agents and others who perpetrated it — have circulated within the fashion world for years, model @cameronrussell started posting stories from models on Instagram last week about abusive situations they’ve encountered — from sexual harassment and molestation to attempted rape. Over 75 have weighed in so far. Read more on WWD.com. Link in bio. #wwdnews
To celebrate its 16th anniversary, @dylanscandybar tapped designers and celebrities to create mosaics out of candy. The mosaics will be auctioned off to support the philanthropic cause of each participant’s choice. Pictured here is the mural created by @aliceandolivia's Stacey Bendet. For a first look at some of the other artwork being unveiled tonight, go to WWD.com. #wwdeye
The annual Veuve Clicquot Polo Classic in Pacific Palisades this weekend drew Kate Hudson, Tracee Ellis Ross, Laura Dern and more. See pictures of the star-studded event on WWD.com. (📷: @chelsealaurenla) #wwdeye
In his new book “Hollywood Royale,” Andy Warhol’s Protégé Matthew Rolston celebrates the Eighties revival of Hollywood glamour. Featuring more than 100 portraits taken by Rolston from 1977 to 1993, the book contains photos of icons like Michael Jackson, Cyndi Lauper, and @drewbarrymore, pictured here in 1991. “Hollywood Royale,” out today, will be accompanied by an exhibition opening at Los Angeles’ Fahey/Klein Gallery on March 1. #wwdeye
"Nowadays when life is not so happy with everything going on in the world, I think people come to me for a little bit of whimsy and color and fun." - Designer Rebecca De Ravenel on her cult-favorite jewelry line. (📸 : @vsteves) #wwd40
“Everyone is talking about how the retail industry is struggling, but I think it’s an incredible time because brands who are doing something different and innovative are setting themselves up for the future,” said @adamgoldston, who founded the luxury athletic brand @apl with his brother @ryangoldsten. The Goldston’s are part of WWD’s 40 under 40: a group of industry notables. See the rest of the list on WWD.com. (📷: @vsteves) #wwd40
@eyeswoon blogger Athena Calderone debuted her first-ever cookbook, “Cook Beautiful,” which is heavily centered on the presentation and visual expression of food. Pictured here are her miso glazed carrots from the book. Get the recipe on WWD.com. (📷: @johnny_miller_) #wwdeye