1.

BRAND OVERVIEW

Prada was founded in 1913 by Mario Prada, Miuccia Pradas

grandfather, in Milan.

Located in the prestigious Galleria Vittorio Emanuele II, Prada

was an exclusive, stylish store selling luggage, accessories and
luxury goods, in fine materials and of sophisticated workmanship.

The Milan store quickly became a firm favourite with the Italian
aristocracy and the most sophisticated members of the European
elite. In 1919 Prada received the warrant of Official Supplier of
the Italian Royal Household, and since then has been able to
display the royal Savoy coat of arms and figure-of-eight knots alongside the company logo.

Miuccia Prada and Patrizio Bertelli started working together in the late 70s, laying the
foundations of the international expansion that was to come. Patrizio Bertelli broke new
ground in the luxury goods sector, introducing a new business model in which he kept direct,
internal control over all processes, applying uncompromised quality criteria across the entire
production cycle. Miuccia Pradas creative talent and avant-garde approach attracted the
attention of the global fashion industry, while her ability to look at the world from an
unconventional vantage point allowed her not only to anticipate, but quite often, to set new
trends.

The classic Prada suitcase was made of heavy walrus skin but as plane travel made heavy
suitcases impractical, the company started to make lighter bags and high quality items made
of crystals, tortoise shell and wood. They also sold garments of waterproof fabrics to the U.S.
However the company had gone into decline in the 1970's.
 1950 Miuccia Prada was born. By her mid-20's she had a doctorate in
political science and in her 30's, she was a communist. In 1970 she
started making backpack bags out of waterproof fabric called
Pocone.

1979 She took over the Prada family business. Since sales were
down, she expanded into luxury tote bags and backpacks in black
with flat classic lines, made from nylon.

1985 She launched a line of footwear for women and her first pret-a-porter clothing
line, using high quality fabrics. Her clean lines gave her fame, and she came to be
known for under-stated elegant garments.

1993 She received an International award from the Council of Fashion Designers of
America.

1995 She won "Designer of the Year" award.

1998 Prada opened their first menswear shop in Los Angeles, USA. They also opened
new Prada stores in Manhattan and Las Vegas, as well as Miu Miu's first North
American boutique, in Los Angeles.

Prada is now a worldwide empire, with stores in practically every country in the western
world. It is a million dollar concern, with every celebrity wearing Prada clothes.

2. NATURE OF BRAND AND ITS TARGET MARKET

The Prada brand targets an international customer base that is modern, sophisticated, attuned
to stylistic innovations, and expects craftsmanship of the highest quality.

The brands iconic trademarks, which are readily

recognized around the world, incorporate the Savoy
coat of arms and Savoy figure-of-eight knot, reflecting
its heritage as an official supplier to the former Royal
family of Italy. Introduced in the 1980s, Pradas famous
black nylon bag with the signature triangle logo has been an enduring classic, with both the
nylon bag and the logo becoming icons in the brands history.
The Prada brand represents the best of Italian
culture and tradition, sophisticated style and
uncompromising quality, and as one of the
most innovative fashion brands are capable of
re-defining the norm and setting new
trends. Prada also captured the attention of
literary and cinematic audiences when the
novel The Devil Wears Prada was first published in 2003, and then was made into a movie
in 2006. The Prada brands distinctive originality is built on its unique approach to style,
craftsmanship and constant innovation in materials and designs, as we unceasingly exert
creativity in the development of fashionable designs, sophisticated fabrics and innovative
production techniques.

At the heart of the evolution of fashion, we believe Prada has been a sophisticated interpreter
of its times and a forerunner of style and trends. Prada is a premium brand. It is very high
quality which unfortunatly comes with a substantially high price tag.

PRADA GEOGRAPHICAL SEGMENTATION

Under geographical segmentation, product or service is divided accordingly to geographic

units, such as nations, states, regions, countries, cities or neighbourhoods.
Directly operated stores, including the epicentres, are designed, constructed and managed in
accordance with precise guidelines: location chosen are among the most prestigious.

PRADA PSYCHOGRAPHIC SEGMENTATION

Psychographic segmentation divides the market into groups based on social class, lifestyle
and personality characterstics.

The PRADA brand targets an international customer base that is modern, sophisticated,
attuned to stylist innovations, and expects craftsmanship of the highest quality.

3. RETAIL DISTRIBITION CHANNELS

Prada, Miu Miu, Churchs and Car Shoe products are sold through two distribution channels:

the retail channel, represented by the single-brand stores (including the three Epicentres)
directly operated by the company, which currently account for approximately 81,8% of sales;

- the independent channel of multi-brand stores, department stores and franchises (socalled
wholesale).

This distribution solution enables the Group to have a presence in the most exclusive points-
of-sale which are either single-brand or multi-brand worldwide. The Groups commercial
strategy is based on a selective analysis of the potential of individual markets, an innovative
approach and rigorous control of display and presentation criteria, and a continuous search
for original sales concepts. Prada has always pioneered new solutions combining design,
architecture, and technology to create environments that not only encourage sales but also
communicate its unique strong brand identity and the cultural influences and values of the
Prada world in a consistent and homogeneous way.

Towards the end of the nineties, Prada decided to redefine the concept of shopping and
enlisted the help of pioneering architects of international renown, Rem Koolhaas and Herzog
& de Meuron, recent winners of the prestigious Pritzker Prize. The result of this partnership
was the creation of the Prada Epicenters: areas and buildings which have rapidly acquired
landmark status both locally and internationally. Pradas Epicentres have not only
transformed the concept of shopping but have also fused it with cutting edge technology and
a multitude of cultural stimuli, offering customers a whole range of unique experiences and
exclusive services. There are currently three Prada Epicentres: one in SoHo, New York
(designed by Rem Koolhaas in 2001); another in Aoyama, Tokyo (Herzog & de Meuron,
2003); and the third in Beverly Hills, Los Angeles (also by Rem Koolhaas, 2004).

Directly operated stores, including the three Epicentres, are designed, constructed and
managed in accordance with precise guidelines: location chosen are among the most
prestigious and the personnel is selected and trained to provide customers with an exclusive
treatment.

This type of store contributes to maintaining a very close relationship with customers,
providing immediate information about the market trend. Moreover, direct-sale stores also
provide very valuable support for the brand, acting as true ambassadors communicating the
Prada image consistently and uniformly all over the world.
Prada manages the independent shops and department stores channel based on selective
distribution and a well-defined strategy of control aimed at maintaining outstanding quality
and high volumes, ensuring consistency in merchandising and monitoring sales performance.
Franchise shops are located in specific markets where this form of retail is imposed by local
legislation or custom, and entail partnerships with local entrepreneurs with an excellent
knowledge of the relevant market.
The wholesale channel, besides ensuring the brand benefits by a series of shop windows in
particularly significant positions in key markets, enables a direct and immediate comparison
to be made with the competitor brands. Therefore, the sales trend through the independent
channel represents a very useful indicator of the consumer trends and brand strength.
4. MANAGEMENT HIERARCHY
5. OWNERSHIP UPON BRAND
Miuccia Prada is the co-CEO and lead designer of the handbag and fashion empire Prada, in
which she has a 28% stake. In 1977 Miuccia and her siblings Albert and Marina inherited the
family fashion business, founded in 1913 by their grandfather. Miuccia met Patrizio Bertelli,
who ran a luxury leather company, at a Milan trade show in 1977 and signed him on as a
contractor. A year later, they were married and Bertelli joined the company, taking care of the
business side of things while pushing Prada into new directions. He serves as co-CEO with
Miuccia, and his stake in the company also makes him a billionaire. In 1986 Prada opened its
first store in New York and expanded beyond high-end suitcases, handbags, and steamer
trunks. A few years later, the company unveiled a ready-to-wear women's collection and a
second brand, Miu Miu. Miuccia, who has a Ph.D in political science from the University of
Milan, took the company public with Bertelli in Hong Kong in 2011.

BOARD OF DIRECTORS

Our Board consists on nine Directors, of whom four are executive Directors, two are non-
executive Directors and three are independent non-executive Directors.

The ordinary shareholders meeting of 26 May 2015 resolved to appoint the Board of
Directors for a term of three financial years. The boards mandate will therefore expire with
the shareholders meeting to be convened for the approval of the financial statements for the
year ending 31 January 2018.

The below shows the current members of the Boards of Directors:

1. Mazzi, Carlo: -chairperson and executive director

2. Prada Bianchi, Miuccia: -chief executive officer and executive director
3. Bertelli, Patrizio: - chief executive officer and executive director
4. Cozzani, Alessandra: -chief financial officer and executive director
5. Cereda, Maurizio: -non-executive director
6. Simontacchi, Stefano: -non-executive director
7. Mattei, Gian Franco Oliviero: -independent non-executive director
8. Forestieri, Giancarlo: - independent non-executive director
9. Liu, Sing Cheong: -independent non-executive director

SHAREHOLDERS STRUCTURE
As of 31 January 2015, the shareholder structure of Prada S.p.A. is composed as follows
http://www.pradagroup.com/en/group/shareholders- structure

7. PRODUCT LOGISTICS

Product distribution is handled through five central warehouses, four in Italy and one in UK.
It is managed by a group division which coordinates product storage, shipping and
distribution, as well as arranging transport and customs procedures.

Central to the Prada Groups distribution strategy is the development of its retail channel in
all markets, both consolidated and emerging, focusing in particular on nations with high
growth potential.

The Groups distribution network extends across 70

countries, counting 551 directly-operated stores (at 30
April 2014), which form the backbone of the Groups
international expansion strategy, and a selection of
department stores and multi-brand retail spaces in the
most significant cities and stylish locations.
The reasons for this strategy are many: not only the
DOS are the supreme showcase for newly-launched
collections, but they also offer a direct relationship with
customers and provide real-time feedback on how each
product category is performing. Over and above their
primary role as a sales point, DOS also represent an important communication tool: real
embassies of each brand, they portray their image in a clear and consistent manne.

Direct sales account for about 83% of consolidated revenues while the remaining 17% is
generated by the wholesale channel (multi-brand retail spaces and department stores 16%),
from franchising (about 1%).

PRADA'S FALL CAMPAIGN IS ALL ABOUT MODERN FEMININITY AND NEW

FACES

The way fashion houses describe their collections and ad campaigns can often sound like
pure nonsense. But the person responsible for announcing Prada's fall 2015 campaign did a
pretty good job of summing it up as "an elegant, ironic ode to meta-modern femininity."

Like the collection itself, the campaign shot by Steven Meisel is very pretty, but odd.
There's a sense of isolation in the arrangement of the models, who do not look at or touch
each other but stare at an unspecified object off-camera. There's also a feeling of youth and
newness provided by a cast of fairly new faces,
including Avery Blanchard, Estella Boersma,
Inga Dezhina, Lineisy Montero, Ine Neefs,
Greta Varlese and Maartje Verhoef, all of
whom have walked the runway for Prada
and/or Miu Miu this past seasons.

Prada has a knack for casting promising models fairly earlier in their careers, so while some
of them already have a campaign or two under their belts, expect to see these girls even more
in the coming seasons. Montero, whom everyone started talking about when she walked in
the brand's fall 2015 show, has already landed a Teen Vogue cover.
LICENCES AND JOINT VENTURES

Eyewear
In 2000 the PRADA Group developed its first Prada and
Miu Miu branded sunglasses, and in 2003 it signed a
licence agreement with Luxottica Group, a world leader in eyewear. Under the creative
supervision of Miuccia Prada and Patrizio Bertelli, Prada coordinates the conception, design,
styling and communications for all collections, while Luxottica has exclusive worldwide
rights to the production and distribution of Prada and Miu Miu sunglasses and eyeglasses.
Not only is this an important business agreement, but it is also an excellent example of
comprehensive cooperation in creativity, style, production and distribution between two
of Italys foremost industrial groups.

Fragrances
In 2003, an agreement was entered into with Puig Beauty & Fashion Group, one of the
worlds largest producers of cosmetics and fragrances, creating a joint venture for the
production, distribution and development of Prada perfumes.
Here, too, Prada is actively involved in the various phases of product, creation and
development as well as communications, while responsibility for production and worldwide
distribution is in the experienced and highly qualified hands of Puig.
In 2004, after lengthy and thorough research by Miuccia Prada in cooperation with some of
the most qualified noses in the world, Amber - the first Prada perfume for women - was
created. Greeted with unanimous critical and public acclaim, Prada
Amber perfume has enjoyed encouraging commercial success in all markets where it has
been presented. In 2006 Prada unveiled its first mens fragrance, Prada Amber Pour Homme,

marking the birth of the first Made in Prada perfumes family under the amber scent.
A new perfume for women, Infusion dIris, was launched in 2007, which was the key to
developing a series of complementary, innovative and personal products for bodycare and for
the home. From this new pillar a collection of limited edition fragrances was derived: the
Ephemeral Infusion Collection that includes Infusion de Fleur
dOranger, Infusion de Tubreuse and Infusion de Vtiver.

In 2011, Prada Candy, the third pillar of the Prada fragrances, is

launched. A new
perfume for women that highlights the funny aspect of the brand
also in the beauty
sector.

Mobile telephones
In 2006, the PRADA Group entered into an agreement with LG Electronics, one of the world
leaders in mobile telecommunications technology, to develop an innovative and iconic
mobile telephone. By leveraging their respective skills, Prada and LG explored all of the
product's aspects together, both in terms of the contents (for example: software, user interface
and music), and in terms of the presentation (from the design to the packaging): the
partnership created the Prada Phone by LG, a unique, sophisticated and elegant telephone,
the first in the world to have an interface that is completely touch screen.

The Prada Phone by LG was launched in March 2007 in Italy, Great Britain, France and
Germany, and subsequently
on the principal Asian
markets and in Latin
America. The product's
high qualitative and
innovative content enables a
significant commercial
success to be achieved, with
more than 1,000,000 mobile
telephones sold.
In October 2008 Prada and LG launch the second phone, another quantum leap in mobile
phone innovation and design, thanks to ultra-thin keyboard and new enhanced technological
features.
In December 2011, Prada and LG unveiled the partnerships latest smartphone, the Prada
phone by LG 3.0 that combines Pradas distinctive style with LGs innovative technology,
including one of the biggest and brightest screens in the world with 4.3inch and 800-nit
screen.
 8. NET SALES OF PRADA

9. CAPITAL OR MARKET VALUE

Income statement

Year on year Prada SpA's net income fell -26.59% from 634.04 million to 465.46 million
despite relatively flat revenues. A contributing factor has been an increase in the selling,
general and administrative costs as a percentage of sales from 48.33% to 54.41%.

Revenue
 Gross margin 72.12%
Net profit margin 8.76%
Operating margin 12.92%

6
5.06 5.01 5.01
5 4.65

4 3.61

Revenue in Billions 3
2012 2013 2014 2015 2016
2
1
1

0
Years

Net Income
 Return on assets 6.05%

Return on equity 9.71%

Return on
7.59%
investment

1000.00
885.18
882.21
900.00
800.00
700.00 609.02 635.53
600.00
Revenue in Millions 500.00 466.55

2012 2013 400.00

2014 2015 2016
300.00
200.00
100.00 1.00
0.00
Years
 Current ratio2 2.24

Quick ratio 1.48

Balance sheet
Year on year, growth in dividends per share remained flat while earnings per share excluding
extraordinary items fell by -26.59%. Additionally, five year annualized earnings per share
growth is in-line with the industry average relative to its peers.

Total Asset
8
7
6
2012 52013 2014 2015 2016
In Billions 4
3
2
1
0
 Total Debit
1200

1000

2012 800
2013 2014 2015 2016
In millions 600
400
200

Total debt/total
https://markets.ft.com/data/equities/tearsheet/financials? 0.3183
equity
s=1913:HKG
Total debt/total
0.2402
capital

Growth rates
ear on year, growth in dividends per share remained flat while earnings per share excluding
extraordinary items fell by -26.59%. Additionally, five year annualized earnings per share
growth is in-line with the industry average relative to its peers.

Dividends Per Share

 Dividends Per Share
0.12 0.11 0.11 0.11
0.1 0.09

2012 0.08
2013 2014 2015 2016
In millions 0.06 0.05
0.04
0.02
0

Div yield(5 year avg) 0.24%

Div growth rate (5

--
year)

Payout ratio (TTM) 99.03%

Earnings Per Share

Earnings Per Share

0.3

0.25 0.24 0.25

0.2 0.17 0.18

2012 2013 2014 2015 2016
In millions 0.15
0.11
0.1

0.05

0
 EPS growth(5 years) 5.70

EPS (TTM) vs
--
TTM 1 year ago

CONCLUSION

Prada has cultivated a reputation for class, style and elegance. This, coupled with effective
marketing and brand positioning, has helped it grow into a luxury goods powerhouse.