MILAN — Prada Group is the latest luxury firm to sail smoothly through the world’s turbulent economic waters.
This story first appeared in the August 7, 2012 issue of WWD. Subscribe Today.
The Italian company on Monday reported a 36.5 percent increase in sales to 1.54 billion euros, or $1.9 billion, for the six months ended July 31. The increase was propelled by growth in all markets, a strong performance of its retail channel and gains at both its Prada and Miu Miu divisions.
The company has been actively developing its store network, which showed a 47.2 percent rise in revenues in the first half, reaching sales of 1.23 billion euros, or $1.51 billion, and accounting for 80.6 percent of total revenues.
Dollar figures are converted at average exchange rates for the periods to which they refer.
Sales in the wholesale channel were up 4.8 percent.
Geographically, the Asia-Pacific area continues to drive Prada’s growth, with sales up 45 percent, followed by Japan, up 34.2 percent, and the Americas, up 31 percent. Despite the ongoing travails of the euro zone, revenues in Europe climbed 37.3 percent while Italy posted a 21.7 percent rise.
Prada Group chief executive officer Patrizio Bertelli said the results “were achieved in an extremely difficult economic environment with the market continuing to reward Prada for its unyielding commitment to style and the pursuit of quality.”
The Prada brand registered a 40.5 percent rise in sales. The group has been investing in the expansion of the Miu Miu label, which showed a 23.6 percent increase in revenues, with more directly owned stores in high potential markets as well as in more mature regions that are still not entirely penetrated. During the first half, the company opened its first Miu Miu boutique in Brazil at the JK Iguatemi mall in São Paulo; its first boutique in Mexico, at the Santa Fe Saks Fifth Avenue, located outside of Mexico City; its first flagship in Morocco, in Casablanca’s Morocco Mall, and new shops at Paris’ Charles de Gaulle Airport, and in Taipei, Taiwan.
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In the first half, the group opened 28 stores, lifting the total number of directly operated stores worldwide to 414 at the end of July, of which 263 are Prada banners, 102 are Miu Miu units, 43 are Church’s and six are Car Shoe.
After 75 openings in 2011, the group earlier this year confirmed an average of 80 a year in both 2012 and 2013. In 2012, 50 percent of openings are planned in “fast-growing markets” such as China, other Asian countries, the Middle East, Brazil and Morocco.
Nearly 40 percent of the openings planned for this year are expected to be Miu Miu units.
More detailed first-half financial figures, including profits, are tentatively scheduled to be released on Sept. 24.
On Monday, Prada shares closed up 2.2 percent at 53.50 Hong Kong dollars, or $6.89 at current exchange, on the Hong Kong Stock Exchange.
Prada is the latest luxury company to see double-digit sales growth in the first half or second quarter, even as there are signs that economic growth in markets such as China, India and Brazil is beginning to slow and both the U.S. and European economies remain weak. LVMH Moët Hennessy Louis Vuitton — whose stable of brands includes Bulgari, Celine, Dom Perignon, Sephora and Guerlain — late last month reported net profits in the first half surged 28.3 percent to 1.68 billion euros, or $2.18 billion, on sales that rose 26 percent to 12.97 billion euros, or $16.83 billion.
PPR reported a 16.7 percent rise in revenues to 6.39 billion euros, or $8.31 billion, for the first half, while net income from continuing operations climbed 16.2 percent to 514.8 million euros, or $664.1 million. Earlier last month, Hermès International reported that sales in the second quarter advanced 21.9 percent, matching its performance in the first three months of the year. The only company to see something of a slowdown was Burberry Group plc, which cited “a more challenging external environment” even as it reported that revenues advanced 11.2 percent in the second quarter.