Core Viewpoint - Prada is facing a significant brand crisis due to the controversy surrounding its global ambassador, Kim Soo-hyun, which has led to a rapid decline in its stock price and raised concerns about its endorsement strategy [2][4][6]. Group 1: Brand Crisis and Stock Impact - Kim Soo-hyun's involvement in a scandal has resulted in Prada terminating its contract with him to mitigate brand damage [2][5]. - Following the scandal, Prada's stock price dropped over 11% within five trading days, indicating heightened sensitivity to celebrity endorsements [4][6]. - The brand has experienced a series of endorsement crises, leading to a perception of a "endorsement curse" that affects its reputation and financial performance [3][5]. Group 2: Endorsement Strategy and Market Position - Analysts suggest that Prada's reliance on high-profile celebrities for endorsements has made its stock price more volatile compared to competitors, necessitating a shift towards a more stable endorsement strategy [7]. - The luxury market is increasingly favoring ambassadors who align with brand values rather than just popularity, as indicated by consumer preferences [7]. - Despite attempts to diversify its ambassador roster, including signing athletes and artists, Prada's financial performance has not shown significant improvement [8][10]. Group 3: Financial Performance and Growth Challenges - Prada's retail sales growth has stagnated, with a reported increase of only 4% in 2024, returning to pre-pandemic growth rates [8]. - The brand's struggles are compounded by a lack of product innovation and operational efficiency, which have hindered its ability to attract younger consumers [9]. - The CEO highlighted challenges in the Chinese market, where growth has been inconsistent, emphasizing the need for a strategic overhaul in product offerings [9][10]. Group 4: Future Outlook and Strategic Adjustments - Prada is seeking to adjust its brand strategy by enhancing cultural activities and reinforcing its brand identity, moving away from reliance on individual designer influence [10]. - The company must focus on reconnecting with its core brand values to navigate the current crisis and improve its market position [10].