MILAN — Helped by currency fluctuations and growth in its own stores, Prada SpA on Wednesday reported preliminary 2015 revenues that were relatively flat compared with the previous year.
This story first appeared in the February 18, 2016 issue of WWD. Subscribe Today.
In the 12 months ended Jan. 31, sales totaled 3.54 billion euros, or $3.91 billion, compared with 3.55 billion euros, or $4.67 billion, in the previous fiscal year.
Retail sales rose 2.5 percent to 3.05 billion euros, or $3.35 billion, compared with the previous year. As of Jan. 31, the group had 618 directly operated stores. In line with Prada’s strategy to focus on its own stores, wholesale revenues dropped to 444 million euros, or $488.4 million, down 16.5 percent.
Europe and Japan showed gains, while the Chinese market dented the performance of the Asia-Pacific region.
Sales of the Prada brand were up 1 percent, lifted by currency swings, to 2.48 billion euros, or $2.74 billion, while Miu Miu’s and Church’s sales rose 10 percent and 14 percent, respectively.
Dollar figures are converted at average exchange for the period to which they refer.
“Throughout 2015, we had to deal with an economic environment characterized by extreme volatility in currency markets, as well as by the deteriorating geopolitical situation in many world regions,” said chief executive officer Patrizio Bertelli. “These two factors have made prices fluctuate widely and diverted tourist traffic in sudden and unpredictable ways. Our retail network — now truly global, thanks to investment in recent years — enables us to keep developing a direct relationship with our ever-more demanding customer all over the world.
“In the coming months, the Prada Group will be focusing its energies on the development of new commercial and marketing initiatives to sustain organic growth, also by means of an extensive digital project to strengthen dialogue with our customers.”
In December, commenting on the nine-months results, Bertelli said during a call with analysts that the company was focusing on technology and social media, from Instagram to Twitter, to engage customers and that, from Jan. 15, Wi-Fi service would be available in its network of Prada and Miu Miu stores to make products more accessible to customers. Chief financial officer Donatello Galli said during the call that Prada’s planned interactivity with customers will also allow the company to acquire “deeper insight” on their behavior. He noted it is increasingly challenging to serve the customer but sees this as “an opportunity.”
On Wednesday, Bertelli said, “These actions, taken against the background of rigorous and disciplined cost control, will enable us to consolidate our market position with satisfactory margins and returns on investment.”
The company said licensed products “performed well” and royalties were up 14 percent to 44 million euros, or $48.4 million, thanks to the contribution of its eyewear collections and the first Miu Miu fragrance, which was launched during the second half of the year.
Europe was up 6 percent, lifted by tourists from the Asia-Pacific region and the U.S. The company said the “results of the Italian market have been even better and remained positive in the fourth quarter.”
Japan rose 11 percent, continuing the upward trend seen since 2010. At constant exchange, sales grew 4 percent.
“The economic situation on the Chinese market remains negative, although there was some improvement in the final quarter,” said Prada. As a consequence, the Asia-Pacific area, excluding Japan, saw a 4 percent drop in sales. At constant exchange rates, revenues were down 16 percent.
Helped by favorable exchange rates, sales in the U.S. rose 5 percent, but, in real terms, revenues decreased 9 percent largely because of the stronger dollar, which affected the flow of tourists to the area.
A good fourth quarter boosted the performance of the Middle East, which closed the year up 11 percent. At constant exchange, sales were down 5 percent.
Full financial results for the 2015 fiscal year, including profits, are expected to be released in the first half of April.