MILAN — Prada SpA plans to open 80 stores a year over the next three years as investments in its own retail network drive the company’s growth.
Spurred by a 33.4 percent increase in its retail channel in the six months ended July 31, the Italian fashion house posted a 74.2 percent jump in net profits to 179.5 million euros, or $256.7 million, compared with 103 million euros, or $131.8 million, in the same period last year. Retail sales accounted for 74.8 percent of revenues, which rose 21.1 percent to 1.13 billion euros, or $1.62 billion in the period. Prada said the company invested 134.7 million euros, or $192.6 million, mainly aimed at the expansion of its retail network.
And that expansion will continue for the foreseeable future: Prada aims to have about 550 directly operated stores by the end of 2013.
“This plan is destined to extend the group’s presence both in countries that experience a high growth in the luxury industry, and in areas where the group’s brands are still under represented,” said the company.
At the end of 2013, Prada expects that about half the new stores will be in Asia, with around 50 in China. Investments are also earmarked for Russia, the Gulf region and Latin America, which were previously served through franchising agreements.
During the last six months, the group opened 29 stores, with an additional 15 units in the following weeks, bringing the number of directly operated stores to 358.
In addition to its own retail, Prada pointed to gains in its core leather goods division and advancements at both the Prada and Miu Miu labels for the performance in the first half. The Prada brand grew 21.3 percent, accounting for 78.6 percent of revenues, while Miu Miu gained 24.9 percent, accounting for 17.8 percent of total sales. The group also controls the Church’s and Car Shoe labels.
“I am particularly satisfied with the results obtained in these six months, that confirm our expectations based on the group’s expansion strategy, which was presented to the investors during the road show leading to the IPO on the Hong Kong Stock Exchange,” stated Patrizio Bertelli, chief executive officer of the company. “Achieving these results confirms the soundness of our decisions and, in perspective, lies the foundations on which we will base our trust in the future growth of the group.”
Prada made its debut in Hong Kong on June 24, and the results reported Monday are its first as a public company. However, there was no conference call with analysts and press interview requests were declined.
Despite the increase in profits, Prada’s shares fell 3.7 percent on the Hong Kong Stock Exchange to close at 41.30 Hong Kong dollars, or $5.30 at current exchange. The decline came amidst a generally tough day for global stock markets, which fell sharply on fears over the Greek debt crisis.
Earnings before interest, taxes, depreciation and amortization rose 39.9 percent to 315 million euros, or $450.4 million.
Operating profit increased 47.1 percent to 253.4 million, or $362.3 million.
Dollar figures are converted from euros at average exchange rates.
As of July 31, net debt stood at 135.2 million euros, or $193.3 million, compared with 408.6 million euros, or $555.7 million, at the end of January. The company said it reduced its debt through a capital increase of 206.6 million euros, or $295.4 million, reserved to the market and operations-driven free cash flow. Prada raised about $2.14 billion from the IPO, with a majority of shares coming from existing stock owned by Bertelli’s wife, designer Miuccia Prada, and others in the company. Another major shareholder was Italian bank Intesa Sanpaolo SpA, which sold 102.25 million shares of Prada, representing about 4 percent of the fashion firm’s capital upon the listing, retaining 25.6 million shares.
Asia-Pacific continues to be the group’s largest market with sales of 368 million euros, or $526.2 million, up 35.4 percent compared with the same period last year.
All geographical markets showed gains, with Europe and the U.S. posting 17.2 percent and 16.4 percent growth, respectively. At constant exchange rates, revenues in the U.S. would have risen 26 percent. Sales in Japan were up 8.2 percent.
Prada’s core leather goods business grew 35.3 percent, accounting for more than 55 percent of sales. The company said ready-to-wear was stable, while the footwear division was up 13.3 percent.
@fearofgod and @maxfieldla have teamed up on a pop-up installation. The store, located in the gallery space across from Maxfield’s Melrose Ave location, is the site of the brand’s House of God pop-up in which Fear of God founder @jerrylorenzo has created a church-inspired installation. A dozen vintage church pews sit in front of an LED screen playing 90s gospel singers in an effort to re-create an environment akin to a Southern Baptist Church, Lorenzo explained. Read more about the pop-up on WWD.com #wwdfashion (📷: Jennifer Johnson)
Known for his sleek, sophisticated American glamour, Norman Norell is the subject of an upcoming exhibition at @fitnyc. “Norell: Dean of American Fashion,” which runs from February 9 through April 14, will feature approximately 100 ensembles and accessories. His best work is exemplified by the designer’s glittering “mermaid” gowns frosted with thousands of hand-sewn sequins – like the one pictured. (📷: William Helburn) #wwdfashion
For pre-fall 2018, @balmain didn’t let go of the glitz. A crystal embroidered baseball jacket priced at around $40,000 hangs in the “couture” section of the brand’s first men’s pre-collection. Sporting the words “Balmain Army” across the back, the item took around two months to make. “When it was completed, it was like Christmas, it was like, ‘It’s done, it’s exactly what I wanted,’” said Balmain’s creative director @olivier_rousteing during a tour of the collection in a Paris showroom on Monday. #wwdfashion
Eighty degree temperatures and outdoor installations at the annual Art Basel Miami Beach called for bright, elevated beachwear. See more street style pictures on WWD.com. #theyarewearing #ABMB (📷: @lifeinreverie)
Following September’s emotional tribute to her brother Gianni, Donatella Versace wanted to bring the spring show’s deep sense of intimacy to her @versace_official pre-fall collection. Donatella found inspiration in Versace Palazzo in Milan and from Gianni’s opulent apartment. Archival patterns and new motifs were splashed on silk shirtdresses and fitted jersey frocks. See the rest of the photos on WWD.com. #wwdfashion
Demna Gvasalia continues to shake up the Paris fashion calendar — and experiment with new runway timetables for his @vetements_official brand. WWD has learned that Vetements plans to stage its next coed show for the fall 2018 season on January 19 during Men’s Fashion Week in the French capital. Details about the timing and venue have not been confirmed — stay tuned on WWD.com to catch the latest. #wwdnews (📷: @giovanni_giannoni_photo)
@zacposen's go-to holiday gift? Cookies! "I'll usually bake cookies and send them as a gift," said the designer, who recently released his cookbook "Cooking With Zac: Recipes from Rustic to Refined." Get the recipe for his Brown Butter-Chocolate Chip Cookies via link in bio 🍪🍪🍪 #wwdeye #cookingwithzac
For @monsemaison’s pre-fall 2018 collection, Fernando Garcia and Laura Kim honed in on the brand’s many signatures — men’s wear, which was tweaked and feminized through deconstruction, proportion play and lots of bare shoulders. See the rest of the photos on WWD.com #wwdfashion (📷: George Chinese)
On Friday night, @yohjiyamamotoofficial received the Design for Asia Lifetime Achievement Award in Hong Kong. The 75-year-old designer has been celebrated for many years and is best known for his dark and avant-garde tailoring. “In my long career, in design, architecture, [I’ve been to] so many parties, this is the very first time that I have such a warm feeling, I really appreciate this,” Yamamoto said. #wwdfashion (📷: @dominiquemaitre)