The ladies are holding up Miu Miu

Author | Wang Xiaojuan

Editor | Zhou Zhiyu

Miu Miu is becoming the biggest winner in the fashion world.

In the Lyst (fashion website) Top 10 hottest brands list for Q1 2024, Miu Miu defeated many well-established luxury brands and directly took the first place.

This brand, which only started to shine on the list in 2022, has become a growth driver for the Prada Group.

Recently, the Prada Group announced its comprehensive performance for the six-month period ending on June 30, 2024. The data shows that the group's net revenue was 2.549 billion euros, an increase of 17.4% year-on-year at fixed exchange rates.

This achievement is even more commendable amidst the declining performance of many luxury brands.

Currently, under the Prada Group, there are brands such as Prada, Miu Miu, Church's, Car Shoe, Pasticceria Marchesi, and Luna Rossa, but the main performance is still contributed by the Prada brand.

In the first half of the year, sales of the Prada brand accounted for 75% of the group's total. However, as a rising influencer, Miu Miu's sales also accounted for 23% of the group's total. This proportion was only 11.8% in 2021.

Moreover, Miu Miu is the brand with the largest growth rate among all brands. In the first half of the year, Miu Miu's retail sales (essentially equivalent to total sales) increased by 92.7%, while Prada only increased by 5.5%.

In comparison, the industry's current situation appears somewhat grim.

In the first half of the year, the long-standing leader in the luxury goods sector, LVMH Group, had revenue of 41.7 billion euros, a 1% year-on-year decrease; however, net profit decreased by 14% to 7.3 billion euros.

The situation for Kering Group, the parent company of GUCCI, YSL, and other brands, is even worse, with both revenue and profit declining in the first half of the year, with profits even halving directly, a 51% year-on-year decrease.

Compared to the industry's conditions, the financial indicators of the Prada Group appear more stable.

As the two most important brands of the Prada Group, Prada and Miu Miu are like two completely different sisters in a wealthy family.

The "older sister" Prada dominates the market with its simple tailoring and cool, sophisticated style, seemingly born for the business world. Like the story depicted in "The Devil Wears Prada," it is a story about female growth.

On the other hand, the "younger sister" Miu Miu is completely different, targeting a younger, rebellious, flamboyant, and extravagant audience, the rich daughters who spend money to seek happiness. On social media, someone asked, "How much do you need to earn to buy Miu Miu?" and a highly praised response said, "Those who work won't buy it, only true rich girls who don't rely on salaries will buy it."

After all, while the older sisters may be generous, they won't pay for a $3,000 headband, a $4,000 patent leather hairband, or a $40,000 diamond-studded underwear. The older sisters still need to consider factors such as the product's value retention and suitable occasions Buying Miu Miu is not about value retention for the rich ladies, it's all about showcasing personality. Coupled with the saying "Those who wear Chanel may not be rich, but those who wear Miu Miu must not be short of money!" Miu Miu has also become the key to traffic on social media.

Although Miu Miu's popularity has only surged in recent years, the brand has actually been around for nearly 30 years. In the luxury industry with a history of hundreds of years, Miu Miu is still considered quite young.

The brand name Miu Miu comes from Miuccia Prada, the third-generation heir of the Prada Group (known as Aunt Miu in the fashion world).

Initially, Aunt Miu was not interested in inheriting the family business and studied political science during her academic career. However, at the age of 28, she had to take over the family brand. The business world had originally left her with a script belonging to Prada - rationality, responsibility, inheritance, much like Prada's brand tone. But she also had a rebellious side, which was reflected in Miu Miu.

Over the past few decades, Aunt Miu has indeed fulfilled her responsibilities as the successor, making Prada flourish while Miu Miu was put on hold, neither hot nor cold.

It wasn't until recent years when Aunt Miu was preparing to retire with her husband that she brought in Andrea Guerra, a senior executive from LVMH, to serve as the CEO of the Prada Group. She also introduced the next generation heir, her 33-year-old eldest son Lorenzo, to the board as a potential successor.

It was only then that Aunt Miu had the time to personally design her own moonlight Miu Miu. In 2022, Miu Miu ignited the fashion world with a spring/summer show and has been hot ever since.

Starting from 2022, Miu Miu's sales have been growing rapidly.

In that year, Miu Miu saw a slight increase of 20% to 432 million euros; by 2023, it grew by 58% year-on-year to 649 million euros; and in the first half of this year, it surged by 93% year-on-year to 530 million euros. By the end of this year, Miu Miu seems to effortlessly enter the 1 billion euro club.

Miu Miu's turnaround once again proves Aunt Miu's design strength and confirms the importance of meeting the rebellious sentiment of the current era.

Furthermore, in the mainstream luxury market, the demand for luxury goods has reached its peak, while brands like Miu Miu still remain fresh to consumers. Their product designs are bold and personalized, hitting the characteristics of their target audience pursuing individuality.

However, Prada Group has a more sober understanding of Miu Miu's high growth. In a previous financial report conference call, Andrea Guerra stated that it is unrealistic for Miu Miu to continue growing at such a high pace in the future. The key to Miu Miu's future growth lies in increased investment, with a focus on the number and size of offline stores, allowing Miu Miu to have the appropriate space Currently, for PRADA Group, the group is still in a critical stage of succession, still requiring steady growth to support a smooth transition