MILAN — Prada Group touted double-digit sales jumps for its Prada and Miu Miu brands but travails at Jil Sander and Helmut Lang and write-downs caused the company to post a loss of 62 million euros, or $77.5 million in 2004.
Prada reported the loss for the 13 months ended January 31. Prada is shifting its fiscal year to end in January, creating a 13-month year for 2004. Sales for the period totaled 1.46 billion euros, or $1.83 billion. The company said that revenue rose more than 6 percent for the comparative twelve-month period, stripping out the negative effect of exchange rates.
"Sales are going well in the whole world, we are just continuing to restructure, which we've been doing for a while," Prada chief executive officer Patrizio Bertelli told WWD in a phone interview.
(Dollar figures are converted from the euro at average exchange rates for the period to which they refer.)
Prada's 2005 looks brighter. Increasing revenue from Prada and Miu Miu, along with restructuring efforts at Jil Sander and Helmut Lang, will "soon restore satisfactory levels of profitability" for the group, the company said in a statement.
The company boasted strong first-quarter retail sales and noted that fall-winter orders are higher than those a year ago.
In 2004, losses and write-downs at Jil Sander and Helmut Lang amounted to 73 million euros, or $91.3 million. A company spokesman said that the firm is taking a "conservative approach" to its balance sheet and chose to write-down the value of certain assets rather than boost its bottom line.
In another move that contributed to Prada's loss, the company wrote-down the value of some properties and assets linked to its Prada and Miu Miu brands. These write-downs and extraordinary provisions came to about 50 million euros, or $62.5 million, bringing the total amount of losses and write-downs at all the Prada brands to 123 million euros, or $153.8 million. A spokesman attributed part of those write-downs to the unfavorable exchange rate environment.
As reported, Prada is restructuring its money-losing Jil Sander division and mulling the future of its Helmut Lang business. Last week, Prada tapped men's wear designer Raf Simons as creative director at Jil Sander and the Italian company is moving the remainder of Jil Sander's production from Germany to Italy to better exploit synergies between Prada Group brands.
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