MILAN — Prada SpA couldn’t have laid the groundwork better for a possible initial public offering: The company on Monday said it closed 2010 with record profits and sales. As chief executive officer Patrizio Bertelli put it, last year’s sales and profits “were never obtained before in the history of Prada.”
Boosted by the performance of its retail network, the Italian luxury goods house said net profit in the year ended Jan. 31 totaled 250.8 million euros, or $336 million, a 150.4 percent surge compared to 100.2 million euros, or $140.2 million, in the previous year.
Sales hit the 2 billion euro mark, lifted by gains across all geographic markets. In 2010, the company reported revenues of 2.05 billion euros, or $2.75 billion, up 31.1 percent compared with the year before.
“The group has a strong industrial and distribution structure, ready to seize the best opportunities offered by any market,” said Bertelli.
Earnings before interest, taxes, depreciation and amortization (EBITDA) rose 84.7 percent to 535.9 million euros, or $718.1 million. Earnings before interest and taxes jumped 123.7 percent to 418.4 million euros, or $560.6 million.
Dollar figures were converted at average exchange rates for the period to which they refer.
The group generated a cash flow of 367.7 million euros, or $492.7 million, which helped cut its debt to 408.6 million euros, or $547.5 million, from 485.3 million euros, or $679.4 million, at the end of the previous fiscal year, and to finance the expansion of its retail network, which comprises 326 directly operated stores. Sales at Prada’s retail division grew 44 percent in the year, or 22 percent on a like-for-like basis, accounting for more than 70 percent of the company’s total revenues. Wholesale revenues gained 9.4 percent.
The Asia Pacific area, where Prada has 104 directly operated stores, showed a 63 percent rise in sales to 645.7 million euros, or $865.2 million. This market continues to be the most important for the group, which said at the end of January it was planning to launch an IPO on the Hong Kong Stock Exchange. Although Prada has not specified a time frame or the size of the stake to be sold, it is understood the company is still pursuing the IPO despite the wobbles of global stock markets following the earthquake and tsunami in Japan. Analysts believe an IPO could happen as early as this spring and value the company at up to $9.5 billion.
Earlier this year, Bertelli told WWD the group plans to open a significant number of stores in Asia over the next three years. This year, Prada plans to open nine stores in Mainland China cities such as Harbin, Guangzhou, Changchun and Hangzhou. Another 11 stores are expected to open in 2012. In January, Prada staged a major fashion show in Beijing and said it was going to open design studios in that city and in Paris.
Other markets also showed gains in 2010. Revenues in Europe and the U.S. rose 20 and 29.5 percent, respectively. Japan, which accounts for 11 percent of sales, also grew 16.6 percent (this figure was released at constant exchange rate). “We have spent the last few years focusing on our brands and the development of our retail network,” said Bertelli. “These results confirm the effectiveness of our strategy.”
The group controls the Prada, Miu Miu, Car Shoe and Church’s labels.
In a separate development, Fondazione Prada said Monday that it will help restore the historical Palazzo Ca’ Corner della Regina in Venice, a Venetian Baroque building erected between 1724 and 1728. The restoration will span an initial six years, and the agreement with the Fondazione Musei Civici di Venezia is meant to be renewed for another six years. The building will be partially opened at the end of May and is aimed at developing a cultural project and promoting artistic exhibitions and research.