MILAN — Prada SpA said net profits more than tripled in the first half ended July 31, boosted by a 41 percent increase in retail sales and growth across all geographic markets.
The Italian luxury goods house said earnings jumped 274 percent to 103 million euros, or $133.9 million, from 28 million euros, or $37.5 million, in the same period last year. Revenues rose 29.4 percent to 936.5 million euros, or $1.21 billion, compared with the same period the previous year. Dollar amounts have been converted at average exchange rates for the periods to which they refer.
Chief executive officer Patrizio Bertelli said growth “will be further strengthened in the following years through the development of our directly operated stores network.”
In the first half, the Prada brand accounted for 78.7 percent of sales, followed by Miu Miu, which accounted for 17.3 percent of revenues. Car Shoe and Church’s made up the remaining 4 percent. Earlier this month, Prada said it had taken full control of footwear and accessories brand Car Shoe.
Earnings before interest, taxes, depreciation and amortization in the first half more than doubled to 225.2 million euros, or $292.7 million, compared with 108 million euros, or $144.7 million, in the same period the previous year.
Sales increased in all markets, including Europe, where they rose 18.7 percent. Sales in the U.S. were up 29.9 percent. A company spokesman said, “Both the retail and wholesale channels showed strong gains” in the region. He added existing stores and new ones helped boost sales in the U.S.
Revenues in the Far East surged 47.3 percent, with Greater China, including Hong Kong, Taiwan and Macau, and South Korea contributing the most.
Prada has been focusing on developing its retail network, with the aim of generating more than 70 percent of consolidated turnover from directly operated stores next year. Last year, the company invested more than 120 million euros, or $166.8 million, mainly directed at the opening of 33 stores in Asia and Europe.
The spokesman said openings in the first half included stores in China, Italy, Singapore, France, Australia and the U.S. Among the most significant openings within the past year were the Miu Miu store in Las Vegas’ CityCenter, the Prada and Miu Miu stores in Shanghai (a 3,607-square-foot venue in the Hotel Peninsula on the Bund, and a 12,960-square-foot boutique in the IFC shopping mall) and Asia-Pacific’s largest Prada flagship, covering 13,000 square feet, in Singapore’s Ion Orchard. In the first quarter, Prada and Miu Miu stores opened in Costa Mesa, Calif.; Las Vegas, and Cannes, France.
In the second half, openings are expected in Italy, the U.K., Germany, the U.S., Japan, Hong Kong, Singapore and South Korea.
Next year, in Tokyo, Prada is moving from one end of the famous Ginza shopping strip to the other, while across the Middle East, freestanding stores are slated for Qatar, Doha and Dubai.
The company said better operating margins allowed the group to improve its net financial position. At the end of July, Prada’s net debt stood at 460.1 million euros, or $598.1 million, compared with debt of 485.3 million euros, or $669.7 million, as of Jan. 31. A figure for the end of July 2009 was not provided.
In July, Prada negotiated a three-year loan agreement of 360 million euros, or $474 million at current exchange, which will partially go toward funding the company’s retail growth and refinancing a long-standing debt.
Depending on market conditions, the group is once again mulling an initial public offering, this time for the first quarter of 2012. Bertelli and designer Miuccia Prada control about 95 percent of Prada SpA through Amsterdam-based Prada Holding BV. One of Italy’s main banks, Intesa Sanpaolo, controls the rest of the company.
In a possible further sign of Prada’s increasing interest in an IPO, Davide Mereghetti, a top manager of important corporate clients for UniCredit, recently joined the firm’s board, succeeding Brian Blake, formerly chief operating officer.
Earlier this month, Prada’s chief operating officer, Sebastian Suhl, told FN, WWD’s sister publication, that the IPO could be in Milan, Hong Kong or London. “We’re trying to figure that out. The performance in Asia is positive and definitely steers one in [the] direction [of the Hong Kong exchange] to a certain extent. But as I’ve said, we’ve seen significant growth in all markets.”