HIGHLIGHTS: Andrea Guerra - CEO of the Prada Group

0:00Hi everybody, tune in to this short version of the podcast, which we do every Friday. For the long version, tune in on Wednesdays. Hi everyone, today I'm in Milan, the heart of the Italian fashion, and I'm in extremely good company with Andrea Guerra, CEO of the Prada Group. Now, Andrea took over three years ago, stepped into the Prada shoes, and at that time the group has grown quarter by quarter. Miu Miu is arguably now the hottest brand in luxury, and you just bought Versace. So, well, welcome. Welcome and happy you're here. Now, Prada is more than 100 years old. What's the DNA of Prada, in short?

0:41You know, Prada is a unique brand.

0:47Prada is a point of view. Prada is an opinion. Prada is culture. Prada is totally winded in certain cultural pillars such as art, architecture, literature, and has always an opinion. And how do you see that in the brand? You can see that in a brand. You can see that in a brand in any aspect, in any location, in anything we do. There is nothing which is not thought. There is nothing which you can spot details which are out of place. There is nothing that we do by chance and not linked to a thought and to an opinion about what's going on in the society. How is fashion changing now? How is the luxury?

1:47You know, I think this industry is upside down. What does that mean? This industry has gone through a couple of decades of constant growth. Let's go to any textbook. That's not possible. That's not feasible. And I think we were all happy. And this industry has grown by three times, four times, five times. in the last only 10, 15 years. So I think that now we have to go through a period of normalization. We have to go through a period where maybe we've been a little bit spoiled. So we have to go back to certain uncertain aspects of the business. So what's normalization? What's the new normal? I think it's the all normal.

2:52This is what we have to look for. It's not the new normal. It's the all normal. Luxury is exclusivity, selectivity, is value, is dreams, it's experience, it's hospitality. This is what we have to do. And this is what it has always been. The world is changing and the media picture is changing. And we got social media and we got attention spans like ants. how does the storytelling art change? You know, I think there are two things. First of all, when people are asking me how are we using artificial intelligence, the main part we're using artificial intelligence is in our CRM. Customer relationship management.

3:39Yes, we are working like hell, hours and hours to really understand which message to which people and how to personalize that message to that person in that moment. And the more you're able to do that, the more business becomes hot. Okay, so I'm coming into your store. You know my background. You know what I bought with you. But even before you're coming to my store, that's where everything starts. What do you sell me? What dream do you sell me? So, you know, I think artificial intelligence today allows you to go into your data and really what I always say look alike. So you bought these things to me.

4:30I'm coming out with this new drop, this new package, these new ideas. And I think these new ideas have these characteristics. how can I match these things and how can I match how hot you are in that moment to come into my brand and buy and when I'm able to connect this wow I have conversion rates which I've never seen in my life moving on Versace iconic has been owned by Americans for seven years now and you are buying it back to Italy why did you buy it? It's an opportunity. We were not out for acquisitions. We feel that the two engines we had can take us somewhere close to 10 billion euros as an ambition.

5:32What's the DNA of Versace? Versace is something we like because, again, it was born in culture. It was born in this Magna Grecia, has this Greek, ancient Greek influence on Italian culture. And it's winded in pop. Versace invented glamour. Versace invented pop. Versace invented the great models. Versace invented music in the shows. So it's this spin, which is very different from our portfolio, but it's in our DNA that we love, that everything goes and starts from culture. What did you see in Versace that other people didn't see? I think that many people have seen what we have seen but we are ready to take the tackle we are ready to take the challenge it's not an easy job has been a little bit mismanaged as a brand, not as a business and we're ready to go and we feel that we know how to do a brand business, we are patient.

7:08We don't think that we have to be successful tomorrow morning, but we need to plant seeds. We need to nurture. We need to have the right people in place and the team is ready to go. How do you think about pricing when something is hot and, you know, it's tempting to price it up? Just how do you think about it? Because I'm seeing some brands and I'm just amazed by the price points. My first answer would be I don't care. That is, am I able to get you your heart, your passion, your dreams, your emotions somewhere? If I'm able to do that, full stop. Each one of us is spending, I don't want to say money, could be money, could be time, in so many different things we love.

8:11On a bottle of wine, I mean, let's discuss it. Or on an incredible room in front of the ocean. There are many different ways we can spend our money. And the issue is, once you talk about price, it's evident I made a mistake in whatever I'm doing in luxury. What do you mean? I mean that you should never talk about pricing because you should be so happy that you give me your credit card without even asking what is the price. This is what we have to do. yeah it happens with some people but it doesn't happen with everybody right sure and maybe maybe this is why i'm saying all normal maybe this industry has gone a little bit too far out this industry has lost one consumer out of five in the last four years three years it's a lot huh move on to um leadership how would people define your leadership style mine yeah ah you know one day I read a book I don't usually read I don't usually read business books at all but there was a lady that was giving us a kind of session in the United States and I read her book and she was talking about resonant leadership which I love What is it?

9:47Which is convincing your mind and convincing your heart that we are all in a journey with a very clear mission and allowing everyone to express to their best. This is what I think I'm doing every day.

10:16Thank you.