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Italian luxury fashion group Prada defied a broader luxury sector slowdown as it reported double-digit revenue growth in the first half of the year, fuelled by surging sales at its Miu Miu label and a jump in sales in Japan.
Net revenues increased 17 per cent to €2.6bn year-on year while retail sales rose 18 per cent to €2.3bn, the company said on Tuesday.
Sales at Miu Miu, the group’s brand that targets a younger generation of consumers, continued a strong run, rising 93 per cent year on year. Those at the group’s main Prada brand grew 6 per cent over the same period.
In regional terms, Japan was the standout performer with retail sales rising 55 per cent. Sales in the wider Asia Pacific region, which includes China but excludes Japan, rose 12 per cent over the period — although the group said growth had slowed in the second quarter of the year against a “backdrop of a tougher comparison base and increasing spending outside the area”.
The Milan-based group’s earnings are a stark contrast to some other recent earnings in the global luxury industry, which is navigating a sharp downturn as consumers rein in spending.
French conglomerates LVMH and Kering last week led a sell-off in global luxury stocks after both groups reported slower than expected sales. Kering, whose flagship Gucci brand continues to struggle, warned investors to expect a weak second half of the year.
Prada group chair Patrizio Bertelli struck a more optimistic tone, saying he was “satisfied” with the group’s above market performance and “confident” about its ability “to navigate the months ahead” through continued investments in the business.
There has been a clutch of some positive results in the sector. Paris-based Hermès last week also defied the luxury downturn to grow sales in the double-digits across all regions, although Asia was the exception. Meanwhile Italy’s Moncler and the Zegna Group reported strong performances with revenues rising 11 per cent and 6 per cent respectively.
Prada has announced large retail investments this year as it counts on customers returning to physical shops. Chief executive Andrea Guerra said Prada and Miu Miu were “capitalising on their unique identity, creativity, and positioning”.
“In the current macroeconomic and geopolitical context, industry dynamics have become more challenging . . . this requires us to be agile and sharp on our product range, communication and overall positioning, to continue to drive client engagement,” he added.
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