Prada Group Buys Four Prada Brand Stores In 66 Million Euros.

Italy luxury brand Prada (Prada) said it had reached an agreement with the head of Prada group, Miuccia Bianchi Prada (Miuccia Prada) and its holding company to buy four Prada products stores in Milan from the latter, at a price of 66 million euros.

It includes the first store Galleria Vittorio Emanuele II opened in 1913, and a store of two Prada brand stores and via della Spiga on Monty Napoleon street, managed and operated by Fratelli Prada company. The shareholders of Fratelli Prada are Bellatrix SpA and Miuccia Prada.

Prada group's move is intended to rectify the corporate structure. The group announcement shows that this change will be an important move to further develop and expand the brand positioning of the group. Last year, the four Milan stores generated a profit of 19 million 700 thousand euros.

According to the terms of the agreement, the acquisition fee of 66 million euros will be paid in installments, and is expected to be completed by 2021.

The couple of Miuccia Prada and Patrizio Bertelli took over the family business in the late 1970s. In 2011, the Prada group went public in Hongkong. The assets did not include the boutiques located in Milan. It was rumored to have been rejected by the Miuccia and Prada family and operated independently by the franchise mode. (see "ornate ambition": chronicle of events: Prada listing)

As of October 30th, Prada's share price closed at HK $24.25. Since the beginning of this year, the cumulative decline of the group's share price has exceeded 5%, which is higher than the Hang Seng Index of Hongkong.

Prada's performance has been disappointing in recent years, and its sales grew for the first time in four years until the 2018 fiscal year. Since 2014, the group's EPS has fallen by more than 60%. (Prada's road to transformation, see "ornate ambition": elaborate on Prada group's transformation path: increase investment in digital channels and production facilities, family two generation posts)

2019 in the first half of fiscal year, Prada sales were flat compared with the same period last year. The group pointed out that it is still rectifying wholesale business, hoping to reduce the size of the channel business to half, thereby promoting sales and sales growth of brand Direct stores.

In 2018, Ludo Srl, a Miuccia Prada personal investment company, was restructured to split all real estate, art investment, liquidity and other securities and some debit balances. Prada's documents on the Hongkong stock exchange show that Ludo Srl owns a stake in Bellatrix Srl 53.8% of the holding company. The company owns Prada Holding 65% and the remaining 35% is held by Prada's joint CEO Patrizio Bertelli.