Why Prada Is Hiring a New CEO

Former Luxottica boss Andrea Guerra is set to become Prada’s new group CEO, as co-chief executives Miuccia Prada and Patrizio Bertelli prepare their succession. The company said Tuesday it would propose Guerra’s appointment at a board meeting in January 2023.

Bertelli, who built the brand into a global name alongside Miuccia Prada, will remain active in the company as chairman of the board. Mrs. Prada will relinquish her role as co-CEO but remain creative director of Miu Miu and co-creative director of Prada (alongside Raf Simons).

The group is also preparing to name a new brand CEO for its flagship Prada label, tapping Gianfranco d’Attis, most recently Americas CEO for LVMH’s Christian Dior Couture division, sources familiar with the matter said. Prada declined to comment.

The moves come as Bertelli, aged 76, and Mrs Prada, 73, prepare to pass control of the company to the family’s next generation. Their son Lorenzo Bertelli, aged 34, joined the company in late 2017 and has taken on key responsibilities managing the group’s marketing, digital communications and sustainability efforts. At an investor day in November 2021, Bertelli signalled that the family’s plan for Lorenzo to eventually take the reins of the company could go into effect within a few years.

“This is a fundamental step we have decided to undertake, while completely engaged in the company, to contribute more to the evolution of the Prada Group and to ease the succession of Lorenzo Bertelli, the future leader,” Prada and Bertelli said in a joint statement.

From 2004 to 2014, Andrea Guerra led Luxottica through a period of rapid expansion as the group — which owns Ray-Ban, Oakleys and Sunglass Hut as well as licensing the Prada and Armani names — expanded its grip on the eyewear category. Since leaving the company, he’s held roles as executive chairman of Eataly and CEO of LVMH’s hospitality division.

Working under billionaires like Leonardo Del Vecchio at Luxottica and Bernard Arnault at LVMH, Guerra has “shown entrepreneurial skills in businesses where the founders are present and engaged, blending their culture and the needs of a company continuously evolving and active on international markets,” Prada’s statement said. Massimo Vian, the company’s chief operating officer since 2020, is also a Luxottica veteran.

Beefing up the Prada Group’s ranks with external talent could ease the transition to a new generation, as well as reassuring investors conscious of the central roles played by its founders.

“The market is likely to react positively to the management changes. While Lorenzo Bertelli has been instrumental in some of the initiatives of the group… it would have likely been too early for him to take on the role as group CEO,” UBS analyst Susy Tibaldi said. “Guerra has a proven track record.”

After meeting in the late 1970s, Miuccia Prada and Patrizio Bertelli worked together to acquire a controlling interest in the leather goods house founded by Prada’s grandfather in 1913. The pair sought to avoid the fusty, conservative perception that then bedevilled Italian heritage houses, instead positioning the brand as the fashion embodiment of Milan’s cutting-edge authority in design, architecture and manufacturing. The pair grew the company into a global powerhouse and household name while continuing to challenge the codes of the luxury industry, offering sporty nylon rucksacks, sneakers and ugly-chic prints alongside its sleek leather bags.

The group made significant strides toward putting in place a creative succession plan in 2020 by hiring star designer Raf Simons as co-creative director of Prada. The designer said in November he was shutting down his namesake label.

Prada’s first-half retail sales rose 26 percent year-on-year to 1.7 billion, up 38 percent compared to 2019′s pre-coronavirus levels, the Milan-based group said in August. The brand is expected to close the year with over €4 billion in annual sales — beating for the first time its 2013 revenue peak (while the brand has maintained cultural relevance and prestige, sales struggled for years to make up for the waning popularity of the hit Galleria handbag).

Other recent steps taken to bolster succession planning at Prada have included putting in place a potentially lucrative beauty deal with L’Oréal — which launched Prada’s first major fragrance in years, Paradoxe, this year — as well as hiring two Goldman Sachs veterans in key roles: chairman Paolo Zannoni and new chief financial officer Andrea Bonini. Zannoni will become deputy chairman to make room for Bertelli as chairman of the group’s board, Prada said.

Prada, which is traded on Hong Kong’s stock exchange, floated the idea of a second listing at its 2021 investor day. On the back of strong growth for the luxury industry since the pandemic, the group is now said to be working with Goldman Sachs to seek as much as $1 billion through a second offering in Milan. That could bolster Prada’s financial war chest to invest in future growth as well as providing a payout for Miuccia Prada and her family, who still control 81 percent of the group’s shares.

Preparing Lorenzo as a future leader, nabbing top managers, signing the L’Oréal beauty deal and exploring the second listing have all been positioned as strengthening the company as an independent operation. Still, takeover speculation continues to swirl following reports that Prada and Bertelli met with top leaders from Kering and Richemont in 2019, as well as signs of rapprochement with LVMH. (Before hiring Guerra and D’Attis from LVMH, Prada companies worked with the French conglomerate to co-found a consortium focused on developing blockchain technology’s use in the luxury industry.)

Prada would be a highly desirable target for luxury’s strategic groups as one of just a few remaining independent luxury houses with both significant scale and clear, desirable brand identity.

Bertelli has regularly insisted that he and Mrs Prada have no interest in selling their controlling stake in Prada. In a November 2021 interview with BoF, however, the executive struck a more open-minded tone regarding potential deals. Remaining independent “is not the first objective we would have in mind. Eventually you can own a smaller slice of a bigger cake,” he said.

The plans to name a new group CEO and Prada brand CEO were previously reported by La Repubblica and Miss Tweed, respectively.