How many managers does it take to run a successful luxury fashion house? Many, if you are to go by Prada's high turnover at its top level management. The Financial Times has unveiled the Milanese based business has a very high turnover, not just in profit, but also in its employees, most notably at management level.
According to public records, Prada has lost a third of its top managers in the nine months following its initial public offering last year in what current and former employees have called a continuing trend of high turnover.
The FT reports that in its IPO prospectus published in June 2011, Prada, which currently employs over 8,000 employees, listed 14 senior managers responsible for the company’s day-to-day management. Of those 14, five were not on a new list of senior managers included in the 2011 annual report published earlier this year.
“That’s a lot of turnover and it definitely raises some red flags,” said Richard Jacovitz, the director of research at Liberum Research, which studies top level management changes at public companies. “You tend to have more turnover in fashion companies like Prada because there are lots of egos involved but that many departures in such a short period is a lot even for a fashion company.”
The five managers who left following the IPO on the Hong Kong stock exchange were the group chief operating officer, the chief executive for Asia Pacific, the CEO of Prada USA, the CEO of Prada Germany and the human resources director.
Three former Prada employees said employee turnover has tended to be high at the company among top and middle managers because of chief executive Patrizio Bertelli’s assertive management style. Some ambitious managers had felt stifled, they said.
Prada’s stock has risen almost 50 per cent since the IPO as the company has continued to report strong results. Revenue rose 25 per cent last year to 2.6 billion euros while net profit jumped 72 per cent to 432 million euros. In the first half of this year sales rose 37 per cent with gains in all geographic areas.
Image: Prada AW12