Activist shareholder reduces stake in Prada

American hedge fund Harris Associates has reduced its stake in Italian luxury group Prada, which is in the midst of trying to execute a turnaround having been one of the worst performing luxury stocks on the market.

Harris Associates, which is known for being an activist investor, reduced its stake from more than 7% to under 6.95% last week by selling 2m shares, according to the The Times. The fund first acquired a 5% stake in the business in 2014 and this marks the first time it has sold any of its shares. (The Italian group floated a minority stake on the Hong Kong Stock Exchange in 2011.)

Prada has missed its earnings forecasts for 11 out of 12 of the last quarters. Analysts suggest that the company, founded in 1913 and still majority family owned, has been punished by consumers for having a limited range and for pushing prices too high; a situation it is trying to resolve.

Prada, which also owns the Miu Miu label as well as Church's and Car Shoe, is likely to suffer further in the short term, say analysts. But there is hope that in the medium to long term it can regain some of the popularity it achieved in the 90s and 00s and can compete again with brands such as Gucci, which has been reinvigorated creatively and commercially since the appointment of a new creative director Alessandro Michele at the start of last year.

Prada's accessory-heavy SS17 show

There have been some signs that Prada, which is under the creative control of Miuccia Prada, is beginning to turn things around. Having been famously digital shy, the brand is now sold online this season having struck deals this season with global luxury retailers Net-a-Porter.com, Mr Porter and Mytheresa.com.

Its SS17 collection shown in Milan in June also showed promise and was heavy on accessories (Prada's strong suit). While it was futuristic in theme, it also included nods to Prada's heyday in the form of new versions of its nylon backpacks, which are predicted to be one of the must-have items next Spring. It is also trying to introduce more accessible price points into its collections, through items such as smaller bags and wallets.