Prada’s Half-Year Sales Slow Compared to 2012

Prada Fall 2013Milan—Prada SpA reported Thursday its first half sales fell to about a third of last year’s as demand for luxurygoods waned in China, now the world’s second largest economy.

Net revenue rose 12% to 1.73 billion euros (about $2.3 billion) in the six months through July, The growth slowed from 36% for the same period last year. And the total sales missed analysts’ average estimate for 1.75 billion euros in sales.

The Asian-Pacific region remains Prada Group’s key market, with a revenue growth of nearly 19% at constant exchange rates, “thanks to a significant contribution from the Greater China area.

Prada’s Japanese business posted 16% growth. The European market, which has benefitted from Asian tourists, posted a 6.7% rise in revenue at constant exchange rates.

“We shall continue to base our long-term growth strategy on the balanced international expansion of our retail network,” CEO Patrizio Bertelli said.

The company had 491 directly-operated stores at the end of July. In the six months ended July, sales advanced 15%, excluding currency moves, while comparable store sales rose 7%.

Prada’s retail division continues to be the main driver of sales growth, with a 20% first-half gain to 1.4 billion euros, while sales in the wholesale channel fell 3%.

The drop followed “the selective strategy adopted by the group, which led to a reduction in the number of wholesale partners by more than 100,” the company said.

 

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Jeff Prine, Editor at Large, Accessories Magazine
Jeff returns as a regular contributor to Accessories magazine. Initially Jeff worked as senior editor at Accessories more than 20 years ago and his love of the industry has followed him until present. Since his tenure here, Jeff has continued to report jewelry, watch and other luxury goods trends as executive editor at Modern Jeweler magazine, fashion director at Lustre, and as contributor on products and trends for consumer and trade publications and websites. In addition to his editorial experience, Jeff also served as an adjunct instructor for accessories merchandising at Fashion Institute of Technology. jeffp@busjour.com

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