MILAN — Prada SpA said Friday that cost-cutting, a winning product mix and a more efficient stock management program propelled profit and sales growth last year.
Net profits increased 63 percent to 76 million euros, or $95.8 million, for the year ended Jan. 31. Sales rose 8.2 percent to 1.43 billion euros, or $1.8 billion, on a constant currency and perimeter basis. Prada said the results confirm the forecasts it made as part of a five-year growth plan presented in September 2005.
"The company's performance is on target in terms of both revenues and profitability. Our brands are strengthening their trendsetting positions in fashion and luxury all over the world," Prada chief executive officer Patrizio Bertelli said in a statement. "The investments in retail we are making in 2007 will allow a further acceleration of our businesses on the most important fast-growing markets. We can be confident as we look forward, also with a view to a potential [initial public offering] in the near future."
As reported, Prada is eyeing an IPO for next year. On Thursday, a Prada spokesman said the company still hasn't set a specific time line for listing on the stock exchange. Prada has flirted with the stock market since it first announced its IPO intentions back in 2000, but the company has postponed the offer four times since then.
In December, Italian bank Intesa Sanpaolo bought 5 percent of Prada for 100 million euros, or $132.6 million at exchange rates for that period. That investment gives Prada an enterprise value of 2.75 billion euros, or $3.64 billion.
Prada owns the Prada, Miu Miu, Car Shoe and Azzedine Alaïa brands. This year, the company will fully consolidate footwear brand Church's into its accounts. Church's is currently part of another holding company in the corporate structure.
The Prada brand is still the biggest revenue generator at the company, accounting for 1.19 billion euros, or $1.5 billion.
Sales at Miu Miu rose more than 22 percent to 154 million euros, or $194 million. Last year, Prada worked to upgrade and strengthen Miu Miu's profile with a new gilded store concept inspired by Lapérouse, the restaurant, where Miu Miu held its first Parisian runway show for the fall-winter 2006-07 collection.Prada said sales at Car Shoe posted "double-digit" sales growth last year to reach 18.2 million euros, or $22.9 million, in turnover. Alaïa revenues grew more than 30 percent to 13.2 million euros, or $16.6 million.
Last year, Prada sold off both the Jil Sander and Helmut Lang businesses. London-based Capital Partners bought Jil Sander, while Tokyo-based Link Theory Holdings Co. Ltd. acquired Helmut Lang. The performances of the two fashion houses are no longer included in Prada's accounts.
Prada said earnings before interest and taxes rose 57 percent to 156 million euros, or $197 million. Earnings before interest, taxes, depreciation and amortization advanced 24 percent to 236 million euros, or $297 million.
Of Prada's 1.43 billion euro in sales, leather goods and footwear accounted for more than 65 percent, while ready-to-wear made up 34 percent. Licenses brought in the remaining 1 percent.
Europe generated 54 percent of Prada's revenues. Asia is the next biggest market, making up 25 percent of turnover. The U.S. accounted for 21 percent of the total.
The company cut its net debt to 496 million euros, or $625 million, from 577 million euros, or $721 million, the previous year.
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