Asia Sales Push Prada 2011 Profit Up 72%

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Milan—Prada reported Thursday that thanks to particularly strong sales in Greater Asia, the company saw its 2011 net profit soar up 72.2%.

And the company, which floated its $2.46 billion public offering on the Hong Kong Stock Exchange last June—becoming the largest consumer goods listing in the world during the year—issued a dividend of 5 cents a share to its stockholders.

For the year ending Jan. 31, Prada said net profit rose to 431.9 million euros (about $575.29 million) compared to 250.8 million euros in 2010. That was ahead of analysts’ average estimate for 414.3 million euros profit.

Total net revenues increased 24.9% to 2.56 billion euros, bolstered by a 37.6% leap in sales at its own retail stores to 1.96 billion euros. Comparable store sales at its retail stores rose 23%

By brand, its namesake Prada brand, accounted 79.2% of total sales, Miu Miu at 17.5% and its Car Shoe brands fell to 5%. By classification, leathergoods, which were up 41.7%, now account for about 56% of all Prada’s sales. Apparel sales were up 6% and footwear, up 11.3%.

“For the third consecutive year, the Asia Pacific market was confirmed as leader both in absolute terms and for growth,” the company said.

Its Own Retail Stores: ‘A Buffer in Times of Trouble’

Most notably, Prada benefitted from its expansion in Asia and the Middle East, opening 75 stores in 17 countries including first ones in Russia and the United Arab Emirates. Asia-Pacific sales rose 34.6% from 30.4% of total sales.

“We will aim to consolidate the group’s position as a leading luxury goods business on all international markets and will continue to draw on innovation, quality and respect for tradition,” Patrizio Bertelli, ceo, said.

Wholesale revenue declined 5.2%, which the company said was due to its policy of being more selective about third-party accounts in Europe as well as harsh weather and delivery problems in strike-torn Italy.

This year, Prada will focus on upgrading and opening more stores, adding 160 to its 388 stores, and another 160 in 2013 to reach at least 500 stores. The company also plans to update stores in mature markets, especially those where there’s been a significant increase in foreign travelers.

“This can provide us with a buffer in times of trouble, and with the clout and speed to approach the emerging markets,” Bertelli said.

As for the outlook for luxurygoods, the company said medium-to-long-term remains “positive” but that “the current macroeconomic environment is still characterized by uncertainty and volatility which, especially in the short-term, could have negative repercussions for performance on certain markets. In light of this situation, the group will maintain adequate control of the use of resources and ensure that it is flexible enough to be able to react to possible changes in the situation.”


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