MILAN — Lifted by the strong performance of its stores, gains in all markets and continued growth of its namesake brand, Prada Group posted a 9 percent increase in preliminary revenues in the fiscal year ended Jan. 31.
Sales rose to 3.58 billion euros, or $4.76 billion, compared with 3.29 billion euros, or $4.24 billion, in the previous year. At constant exchange rates, revenues would have climbed 13 percent.
Chief executive officer Patrizio Bertelli said the 2013 financial year “was the fourth consecutive year of strong growth. Against an unfavorable background of exchange-rate volatility and the ongoing negative economic situation in Europe, we have maintained one of the highest rates of growth in the sector and have continued to pursue our objectives of retail growth. RELATED CONTENT: WWD Earnings Tracker >>
He noted the company had launched a program of investment in Italy to improve its production structure and quality.
“The investments made, together with important marketing initiatives in support of the image of our brands, enable us to look forward with confidence to further progress in 2014,” he added.
Sales of the group’s own retail network rose 12 percent to 2.99 billion euros, or $3.97 billion. The Milan-based firm attributed the growth to newly opened stores and to a 7 percent increase in same-store sales. The wholesale channel showed a 7 percent decline as a consequence of the company’s strategy to streamline the network, in Europe in particular.
During the year, the group opened 79 stores, reaching a total of 540 directly operated units at the end of January. The new stores included 330 Prada units, 150 Miu Miu venues, 52 Church’s and eight Car Shoe. Among the most recent openings were four new Prada stores in Brazil; new Prada and Miu Miu venues in Istanbul; a Miu Miu door at Saks Fifth Avenue in Miami; Prada’s first boutique in Kazakhstan, in Almaty, and a new unit in Courchevel, France. A new Prada boutique also opened in Florence in January.
The Asia Pacific region grew 11 percent, and Greater China in particular significantly contributed to the gain with sales of 826 million euros, or $1.09 billion, up 15 percent at constant exchange rates.
In the U.S., sales increased 11 percent, entirely boosted by the group’s retail channel, which jumped 36 percent at constant exchange rates.
Despite the difficult economy in Europe and the recent strengthening of the euro, the area was up 5 percent, lifted once again by Prada’s retail channel.
Japan continued to grow, showing a 24 percent rise at constant exchange rates, although the ongoing weakness of the yen meant that the euro equivalent revenues were broadly in line with 2012, up 1 percent.
Counting 16 directly operated stores in the Middle East, the region generated sales of 90 million euros, or $119.7 million.
The Prada brand saw sales climb 11 percent, or 16 percent at constant exchange rates. Miu Miu was up 1 percent and the company pointed to “encouraging signs from emerging markets (including China) and the Americas.”
Church’s posted a 3 percent gain at constant exchange rates.
Dollar amounts are converted at average exchange for the periods to which they refer.
In a report for Citi Research, Thomas Chauvet, head of European luxury goods research at Citigroup in London, said that while Prada “shares continue to underperform in the luxury sector,” Citi expects “Prada’s revenue/earnings dynamics to outperform most luxury peers over the next three years on retail immaturities/expansion, strong product innovation/merchandising, global tourism and product mix (leather goods), thus gaining further share of the global soft luxury goods market.”
The research also noted that “the market seems to continue to underappreciate Prada Group’s superior earnings growth profile in an overall subdued 2014 luxury sector environment, Prada brand’s superior sales momentum in China, early benefits from the brand repositioning in Japan and the U.S., long-term upside potential from Miu Miu, and strong balance sheet/potential for capital returns.”
Full year-end results will be released on April 2.
From overseeing America’s fastest-growing speciality retailers to codifying cool, WWD talked to the women who are leading the way for the future of beauty. Check out our Instagram Stories to see how these women built today and are creating tomorrow. (📸: @hannah_khymych) #wwdbeauty
For @laperlalingerie's spring 2018 show, the brand chose to host their event at @thevenetianmacao. With Chinese megastars @bingbing_fan and @hubing in attendance, La Perla debuted a rock ‘n’ roll-inspired collection. The show marked the start of Sands Macao Fashion Week, which runs from October 19 to 24 — the city’s first such event. Pictured here are models backstage with glimmering eyes. #wwdfashion (📷: Cheuk-Yin To)
Trending for spring 2018: top stitch design. Gone are the days of stitch just for seams — designers are using the once-minimal detail to create strong decorative elements. (📷: Paola Testa; Styled by @andrew_shang) #wwdfashion
@tradesy is turning the concept of a showroom upside down with its new space in Santa Monica. Here, the company plans to hold events, art exhibits and a showcase rare fashion pieces like this Louis Vuitton boxing set. Get all the details on Tradesy’s first showroom on WWD.com. #wwdnews
Spotted last night at the @erdem x @hm launch event: Kate Bosworth, Rashida Jones, Kirsten Dunst and Selma Blair. The party, which took place in LA, also marked the opening of their pop-up shop. “I was interested in creating a collection that wasn’t in any way disposable. It was about pieces you’d create and keep forever, things that have a permanence to it,” designer Erdem Moralioglu said. #wwdeye (📷: Katie Jones)
Renee Zellweger in yellow in 2001 and again in 2017. Chosen as one of the 12 @pantone Leading Spring Colors (and dubbed “Meadowlark”), it only makes sense that the bright hue stands the test of time and is making a resurgence this season, seen already on stars like @blakelively and @gigihadid. (📷: Donato Sardello & @rexfeatures) #wwdfashion #tbt
Dior’s 70th anniversary celebration continues with a new exhibition at the Royal Ontario Museum in Toronto. “Christian Dior,” which is scheduled to run through March 18, takes a look at the founders tenure from 1947 to 1057 and feature 40 designs. Pictured here is an evening gown from the Ailée, fall 1948-49 haute couture collection. #wwdfashion (📷: Brian Boyle)