Prada managers leave after IPO

PRADA, the Italian luxury goods group, lost a third of its top managers in the nine months following its initial public offering (IPO) last year in what current and former employees have called a continuing trend of high turnover.

In its IPO prospectus published in June 2011, Prada, which has 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

That’s a lot of turnover and it definitely raises some red flags …You tend to have more turnover in fashion companies

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 CE Patrizio Bertelli’s assertive management style. Some ambitious managers had felt stifled, they said.

Prada declined to comment on the management departures or to make Mr Bertelli available for comment.

The most high level departure following the IPO was Sebastian Suhl, the chief operating officer who left early this year to become the chief executive of French luxury fashion house Givenchy. Mr Suhl, who declined to comment, joined Prada in 2001, rising to become chief operating officer in 2009.

“Suhl was a key driver for Asia,” said an Asian-based analyst with 25 years experience. “I worry his departure leaves Prada much weaker in their key growth market, Asia.”

The other four top managers had worked there for four years.

Despite the recent departures, some top managers have had long tenures at Prada. The nine senior managers listed on both the IPO prospectus and the 2011 annual report have been at Prada an average of about 13 years, ranging from seven to 23 years. Mr Suhl and the former human resources director reported directly to Mr Bertelli while the other three departing managers reported to Mr Suhl.

Prada’s stock has risen almost 50% since the IPO as the company has continued to report strong results. Revenue rose 25% last year to €2.6bn while net profit jumped 72% to €432m.

In the first half of this year sales rose 37% with gains in all geographic areas. Financial Times