Byline: Sharon Edelson

NEW YORK — Prada takes the issue of distribution very seriously.
The company, which has seen unprecedented demand for its product in recent years, can afford to pick and choose its retail accounts. It can also afford to cut a few, which Prada said has become necessary as it opens more and more company-owned stores.
This should come as no surprise, given that the company scrupulously controls its image and product quality. With its self-stated goal of channeling more sales through its own boutiques, Prada has aggressively been signing leases and even purchasing property outright in the U.S., beginning with the 18,000-square-foot flagship on Madison Avenue and 70th Street that opened last October.
In the last year, the company has signed a lease for a 20,000-square-foot flagship at 724 Fifth Avenue between 56th and 57th Streets, and it has bought a five-floor, 12,850-square-foot building at 30 East Oak Street in Chicago and a six-story, 24,000-square-foot building on Post Street in San Francisco.
Prada opened its first store in Dallas this month and plans to open units in Manhasset and Toronto by the end of the year.
Prada is taking a similarly ambitious view of its global business.
There are currently 87 Prada stores worldwide, and the company plans to open 11 more by the end of the year, including units in Melbourne and Sydney, Australia; Berlin, and Taipei.
Next year will be a busy one, when Prada opens 17 units worldwide. Eight will be in the U.S., with top billing going to the four-level store on Fifth Avenue. The Chicago store is also expected to open in 1998.
In addition, the company has signed a lease at the Bellagio, a new shopping center in Las Vegas described as an upscale version of the Forum Shops, a Prada spokeswoman said. There is also interest in opening stores in Boston and Atlanta, but locations have yet to be found, the spokeswoman said.
On the international side, Prada is planning to increase its presence in Milan and London with new stores. Units will also open in Venice, Verona, Osaka and Kobe.
The San Francisco flagship on Post Street is scheduled to open in the spring of 1999.
All the new stores have obviously caught the attention of other retailers — some of them former Prada accounts.
“Our resources have become our competitors,” said Linda Dresner, who owns two eponymous boutiques on Park Avenue here and in Birmingham, Mich. “It’s a real thing, not a suppose thing. It’s the truth. [Prada] has said already that they won’t sell to us. Prada has grown and is no longer available to us. They took it away from us in spring 1996. Prada has always been a very good product for us, so we miss it in New York and have had to substitute.”
Prada’s plans for a Fifth Avenue unit have raised the question of whether the company will continue to sell to retailers in close proximity to the store. Prada is sold in Barneys New York and Bergdorf Goodman.
“Our own retail business is going to increase over the next two years, while the wholesale accounts will decrease,” the spokeswoman said. “As we open new stores, we refocus our distribution.”
Prada has said it plans to cut independent retail and department store doors carrying the brand from the current 502 to 465 in 1998.
Patrizio Bertelli, whose wife and business partner is designer Miuccia Prada, discussed his plans to rein in distribution in January. At the time, he said the firm would eliminate those distributors that appear to be higher risk or “less loyal,” in a move toward channeling more business through directly owned shops.
Sales through directly owned stores represent 67 percent of the company’s business, while department and specialty stores represent 33 percent. In 1998, directly owned stores will do 72 percent and external stores 28 percent, a spokeswoman said.
“We’re only going to sell to the people we like,” Bertelli joked in January. But Bertelli also projected some hefty sales forecasts. In 1996, Prada registered $300 million in total wholesale sales and is projecting a 60 percent increase this year to $480 million, while the outlook for 1998 is $620 million.
“The percent of apparel business is increasing in relation to overall business in men’s and women’s in Prada and Miu Miu,” the Prada spokeswoman said. “North America has incredible potential for Prada men’s and women’s and for Miu Miu.”
Miu Miu currently operates 16 stores worldwide. Five stores are scheduled to open by the end of the year in London, Milan and Taipei, with two slated for Hong Kong.
For 1998, the company has projected nine Miu Miu openings worldwide.

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