Report – Prada during Covid19

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Executive Summary

Being a global concern, coronavirus pandemic has rapidly become the major issue for most of the industrial department. The fashion industry is among those industries facing numerous problems and have been facing challenges in managing operations effectively due to covid19. The stock market is facing fast declines, and consumers cannot get their desired services and products.

Prada is a fashion brand which is popular for producing apparels and accessories. This company was found in 1913 and is headquartered in Milan, Italy. Prada is the most luxurious brand specialising in numerous fashion products including traveling accessories, shoes, handbags, perfumes, watches, clothing and more.

Below in the report, after identifying and explaining the problems faced by Prada after covid19, situational analysis will be done in which internal and external environmental analysis will take place. This study will comprehensively explain the market position of the brand and will propose appropriate recommendations for Prada to accompany and to enhance its performance in the competitive market.


Aims and Objectives

According to FashionUnited, 2020, covid19 has become the international topic of discussion on the height of this season’s fashion month; however, its impacts continue to affect the fashion industry. As per the evidence, fashion and apparel companies must respond quickly to secure their operations and overall business continuity ( Xie et al., 2020). For this, fashion industries need to change their business models per the new trends and requirements, which may be significant coming out of this disruption.

This case study analysis report has some principal aims and objectives, and this entire report will be fostering towards achieving those aims. Firstly, this report aims to critically investigate the performance of chosen fashion brands during covid19. Secondly, the challenges and opportunities faced by the fashion brand will be discussed to identify the business problems precisely.

Moreover, the major objective of this report is to perform the situational analysis of the selected brand to know how it has overcome the challenge. This study aims to identify the problems that the company has not solved due to covid19 yet and produce the recommendations for future. For this, secondary and primary research will be done to analyze the challenges, recommend the solution and support the perspectives.

Introduction to a fashion brand

Prada is a fashion brand that is popular for producing apparel and accessories. This company was found in 1913 and is headquartered in Milan, Italy. Prada is the most luxurious brand specialising in numerous fashion products, including travel accessories, shoes, handbags, perfumes, watches, clothing, and more ( Zhu et al., 2017).

This company is considered one of the most fashionable and demanded global brands in the luxury and fashion industry. It is also renowned for its innovative strategies, transformation, and independence. The company’s mission statement states that ” Prada strives to develop meaningful and careful observation of and curiosity about the world, culture, and society. These factors are at the core of Prada’s modernity and creativity ( Koppejan, 2016).”

Introduction to a fashion brand

Figure 1- Net Sales of Prada worldwide between 2013 and 2020. Source: Koppejan, E., 2016. How can Prada make its intellectual character visible to a broader audience while restoring its exclusivity? (Doctoral dissertation, Hogeschool van Amsterdam).

Identification of Problem and Need for Research

Moreover, some major impacts of covid19 were observed on the operational efficiency of Prada. But the evidence says that Prada has done quite an amazing job in overcoming the challenges of covid19. Recently, Prada reported declining its sales and profits by the end of 2020 due to covid19, which was later fixed due to higher consumer demand from China and other Asian countries ( Larchenko, 2020).

One of the major problem faced by Prada was its realization that market changes are not being responded to effectively as well as its relationship to the local customers tend to deteriorate and had nearly completely got offset due to the lack of tourisms. As per the statistics, Prada Group witnesses the €180 million loss after June 2020 from the profits of €155 million from the same period in 2019 as the pandemic took its toll on the company ( Elavarasan et al., 2020).

Another identified problem was the performance of the company was harshly affected due to lockdowns and government restrictions. These situations forced Prada to operate its 40% stores only and close others throughout the pandemic period. Net revenues of the company fell 40% to €938 million at the constant exchange rates ( Brydges et al., 2020).

However, some opportunities were also observed, that e-commerce platform of the company grew to many levels, but overall revenues decline double-digits across the globe. Prada was adversely affected in the Middle East, America, and Europe, where retail sales dropped between 40% and 44% ( Khan et al., 2021) .

Identification of Problem and Need for Research

Figure 2- Prada net sales in 2020, by geographical region source: Brydges, T. and Hanlon, M., 2020. Garment worker rights and the fashion industry’s response to COVID-19. Dialogues in Human Geography10(2), pp.195-198.

The investigation of the market, communication, strength, threats, and opportunities of the Prada group will benefit the company as we will be assessing the conclusion of reasons and back lags of the company where it had to perform better. The recommendations and implementation plans derived below will help the Prada group overcome the covid19 impacts and improve its operations more than before.

Figure 3- Prada Sales 2019. Source: Peiyu, W., 2020, November. Analysis on the Different Response of Fast Fashion Brands and Luxury Brands to the Epidemic. In 2020 2nd International Conference on Economic Management and Cultural Industry (ICEMCI2020) (pp. 15-18). Atlantis Press.

Therefore, through the period of covid19, Prada Group faced some serious challenges and threats but also encountered some opportunities. Regardless of the numerous identified problems, the Prada group coped well through its leadership in business management, innovation, diversification, and creativity.

Moreover, digital presence has played a vital role for Prada in dealing with the condition of covid19 along with the sustainable and communicative approaches (Peiyu, 2020). To investigate the performance of Prada after covid19 and to cover the strategic options acquired, the company’s current internal and external environment will be assessed. The next section of the report will comprise of a detailed assessment of the current market and communication strategies of Prada Group.

Methodology of Investigation

A proper methodology will be used to investigate how Prada Group has responded to the challenges resulting from covid19. Firstly, the existing literature will be consulted to assess the internal and external environment of the company to provide effective recommendations. The problems identified above will be investigated through primary research, in which the answers collected from the class students will be analyzed.

Study Limitations

This report may bear some limitations too. Firstly, there are numerous sources about the impacts of covid19 on Prada Groups but does not have sufficient literature explaining the ways acquired by Prada to overcome those challenges. This problem will be covered after performing the situational analysis of the brand, and recommendations will be enough for Prada to implement and grow the business operations and profitability as before.

Situation Analysis

Current Market Analysis

Market analysis of a certain company can be done when marketing strategies are known. A successful brand always looks to strengthen its marketing strategies to assure the company’s growth. However, Prada’s marketing mix will be observed to realize the company’s positioning in the market before and during covid19. In response to covid19, Prada preferred to bring customized marketing strategies to make its products recognized worldwide so that they can be differentiated from other fashion brand products.

Current Market Analysis

Figure 4- Market Analysis of Prada through the marketing mix. Source: Bellin, H., 2016. Branding and marketing channel strategies: Some effects on channel partners. Journal of Marketing Channels23(4), pp.255-257.

Products: the brand is popular in the international market because of its luxury designer clothes and accessories, bags, shoes, and jewelry. Prada’s products are unique in terms of price, quality, and design and are considered best in terms of comfort.

Price: the prices of Prada are premium due to their uniqueness, which was one reason why the company failed to attract consumers during the pandemic because covid19 brought financial instability for almost everyone. But the loyal customers of Prada do not think to pay high prices because Prada is never seen to compromise on their quality and design and provide efficient customer service ( Bellin, 2016).

Place: within the market, Prada being an international player, fosters to initiate outlets in big cities and high profile shopping areas. However, Prada’s online existence and digital presence have changed the company’s selling and buying scenario. Prada has been making records during covid19 due to its online business growth and high market position during the pandemic.

Promotion: Prada has been seen to attract customers in the market through effective communication and unique advertising technique in different forms, such as huge billboards in busy areas. Digital advertisement has been the most effective marketing strategy acquired by the company during covid19 through an online website that is quite well-designed and social media (Trollope, 2018).

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SWOT Analysis of Prada

SWOT analysis is used to investigate the company’s positive in the external competitive market. Assessment of the weaknesses, strengths, opportunities, and threats of Prada will help develop effective and workable recommendations, which will help {to cope with covid19 challenges. Following is the SWOT analysis of Prada.

Figure 5- SWOT Analysis of Prada source: Xu, Y., 2017. Financial Analysis of Prada Company.

Strengths: because of the strong free cash flow model, Prada can easily expand any new project. The company has an enormously high brand image for the elite class. Prada acquires highly skills and a strong workforce comprising properly trained individuals to acquire organizational goals. The company is highly advanced in technology, due to which it has not bore much operational loss during covid19. Innovation in the products takes place efficiently in Prada, another plus point in response to covid19 ( Xu, 2016).

Weaknesses: for the training and development of the workforce, the cost is higher, which are filled in through the consumers. Prada does not plan the financial items effectively. Due to the mismanagement of assets, a higher liquidity ratio is observed during 2020. Moreover, there is a remarkable gap in Prada’s product line due to which the competitors can easily enter into its market.

Opportunities: while covid19 has brought several challenges for different industries, it also came up with some opportunities. Prada has identified the major opportunity to adopt new technologies and emerge the new market by effectively attracting consumers from worldwide through digital marketing. Along with the business patterns, covid19 has changed consumer behaviors too, which can help Prada develop new revenue streams and diversify new product categories (Marcos et al., 2017).

Threats: An increased competition of fashion brands is a massive threat for Prada before, during, and after coronavirus. The competition has decreased the profitability and sales of the company. Due to traveling bans and other political restrictions, the supply of raw or ready-to-use products is not being done regularly. Therefore, Prada is losing its enhancing trend in the market. Because of the lockdown, many of Prada’s workforce left for their hometowns, now the global market required more skilled employees, so this is the major threat for Prada (Praveena et al., 2018). Another threat for the company is that only elite class consumers are the company’s target customers, which does not leave a better impression in the eyes of middle-class customers who look for quality fashion products.

PESTEL Analysis of Prada

PESTEL analysis is aimed to provide valuable information about how Prada operates externally. It will be helpful to assess the challenges faced by this fashion brand currently during covid19.

PESTEL Analysis of Prada

Figure 6- pestel analysis of Prada. source: Annan, J.A., 2017. A marketing plan to launch the new bespoke collection by Heel the World, to increase sales and brand awareness.

Political: Prada is likely to gain enough understanding of the political environment of the country in which it likes to operate in, including government policies, political instability, corruption, taxation procedure, and so on. The political environment during the pandemic has stayed quite unstable, and Prada faced challenges to operate effectively due to lockdown restrictions.

Economic: Prada is open to different economic factors including, interest rate, inflation rate, the exchange rate of foreign currency, and employment rate too. Covid19 proved to the period which impost the most negative impacts on the economic stability of Prada. The employment rate was not good enough during this time, due to which Prada did not witness higher profitability and a good market share ( Matovic, 2020). However, borrowing money is easy in the international market because the interest rate is comparatively low. Therefore, due to the financial crisis during covid19, Prada got enough opportunities to borrow money from other business segments.

Social: social environment refers to the religion, social status, culture, values and beliefs of people, etc. Therefore, Prada seems to perform better in areas where the culture is rich, and people are socially active. Moreover, Prada operates most efficiently in areas where most people are employed and maintain their class by using luxury products ( Burberry, 2018). However, Covid19 has also brought a break in this.

Technological: Technologically, Prada is doing very well in an international and local market. Most of the company’s sales were increased during the pandemic because of the presence of Prada online and through its online buying portal. Still, Prada needs advanced technology to utilize new innovative ideas, planning strategies, and other online activities. So, Prada aims to move towards the market, which is technological-based.

Environmental:  people all around the world accept products that are environmentally friendly because most of people are cautious about this factor. Covid19 has made people more sensitive towards clean and sanitized products. For this reason, Prada always follows the rules of the environment imposed by the government in which this fashion brand operates.

Legal: Most countries where Prada operates impose legal restrictions, which Prada always respects. Also, some major legal factors, including discrimination laws, intellectual property laws, pricing, quality policies, environmental laws, health, and safety laws, continually influence the operations of Prada Group ( Annan, 2017). Similarly, the company respected the legal policies of the countries where Prada operates in response to the covid19. Still, they put negative impacts on the operational efficiency and profitability of the company.

Analysis of other business factors

Regarding the financial performance of Prada, the operating profit of the company declined by 5.3%  to €306.8 million when the organization perceived the height of covid19 restriction and increment in the operating expenses in the form of more spending on events, labour, and media which according to Prada will give rise in sales.

Contradictory to this, Prada realized that digital marketing of business provided more benefits than the strategies mentioned earlier. Moreover, the Prada group was seen to develop the band momentum and engagement of new generation and types of customers through advanced technology and activations like Prada Mode. As discussed above, the consumer profile of the company targets the elite class customers who are employed and can buy Prada’s premium-priced products.

Market position is discussed above, along with the strategies followed by the company to operate in the international market effectively. Most of the time, Prada is seen to gain a competitive advantage because of its high-quality products and high customer demand. However, according to the CEO of  Prada, Patrizio Bertelli, “ local customers did not come up with buying behavior and offset the lack of tourism, but we could not achieve the revenues which we had in 2019.” Products offered by Prada are also discussed above according to which company produces high-quality products including apparels, accessories, like jewelry, bags, clothes, etc.

Recommendations and Implementation

Regarding the costings and timings, it is recommended that Prada introduce a comprehensive cost-cutting program in response to the covid19 crisis. This program should include lease agreements, cancellation of numerous marketing activities, and cutting discretionary spending. Moreover, it is also recommended for the company to Prada needed to fix its costing and should revise its pricing strategies.

On the wholesale level, Prada has been following and should continue following its rationalization strategy. This strategy can enhance the company’s sales by 71%. The rationalization strategy particularly includes the phasing out of markdowns in which the brand is positioned in the high bracket of high-end luxury brands. Also, the company has claimed that it has the potential to increase the gross margin; therefore, Prada should increase the prices of all the products totally and match the increased production costs.

However, Prada should move forward with the help of some major strategies. Digitalization of business should be one of the top priorities of the company. Technology is perceived to be used in all parts of the business, including the supply chain, and companies that do not indulge in technology will be left behind.

Therefore, to cope with covid19 and its adverse impacts, Prada needs to work on automation, 3D sampling, and show the digital product sample to the target consumers so that customers know about the upcoming product line and can book their desired product. Most of the fashion brands have started to use Virtual Reality ( VR), Augmented Reality ( AR), and other live streaming technologies during the period of lockdown. Prada should look to acquire these technologies too so that it can achieve a competitive advantage over its competitors and could attract more recursive customers.

Regarding the supply chain and marketing strategies, Prada needed to note the response of market changes as a result of covid19 and then should strengthen its relationships with the international and local consumers. Understanding the market strategies will help Prada build strong connections to consumers, and eventually, the company’s sales will rise.

Prada has a vast ability to show resilience which is widely down to its ability to evolve and to rise from ashes. Prada can witness this internally if the company announces its effective partnership with well-known fashion designers and design companies. This consultation action will result in Prada’s success in the post-covid19 period. Like other fashion brands and industries that started benefiting from the long wave of success by relying on their laurels and revising the vision statements, Prada can also experience this success by rethinking and revising its business models.

Therefore, changing the previous business model for Prada is one of the most recommended strategies to respond to post-covid19 challenges. Prada can gain a competitive advantage and raise its sales by implementing effective leadership strategies in business management, innovation, and creativity. The company can beat other well-known companies by relying on advanced communications strategies and sustainable behavior.

Sales of Prada are anticipated to increase in 2020 and 2021 as compared to 2019 levels if the company works to strengthen its e-commerce business model. Therefore, Prada should launch its well-designed and user-friendly website and expand its e-commerce by offering new and diversified products in the new key markets internationally and locally.

Like before, Prada is required to implement some innovative communication strategies to market its products to a large number of target consumers. Media, theatre advertisements, and movies are effective communication strategies that will help Prada develop a valuable marketing approach and create a brand-new consumer experience.

It is evident that Prada, like other fashion brands, during this temporary economic downfall due to covid19, has the major opportunity to rethink about the fundamental and underlying values. Therefore, Prada should pay attention to its consumers through the accessible platforms available. The common perception is that currently, social media is keeping the world interconnected every passing second of the day.

Thus, Prada needs to be creative in the presentation of business and in the format of offered products after covid19 by being flexible in the face of rapid change. Prada can develop short-term marketing messages to make commitments to the consumers. This way, brands can act and respond in comparatively more powerful ways. Thus, Prada should prioritize communicating with its audience to diminish the uncertainty by putting the choices and wellbeing of customers before business. This time of the era can be taken as an opportunity by Prada to improve its digital offering and grow eventually.


Based on the above discussion, it can be evaluated that Prada Groups, the well-known fashion brand, faces numerous challenges in response to covid19. However, most of the evidence was proposed, which explained the acquired strategies of Prada to deal with such challenges effectively. Moreover, a situational analysis was done to assess the company’s internal and external marketing environment to know how Prada is acquiring strategies to deal with the challenges of covid19.

It was found that Prada Group witnessed the €180 million loss after June 2020 from the profits of €155 million from the same period in 2019 as the pandemic took its toll on the company. Another identified problem was the performance of the company was harshly affected due to lockdowns and government restrictions. It is evident that Prada, like other fashion brands, during this temporary economic downfall due to covid19, has the major opportunity to rethink about the fundamental and underlying values.


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