PRADA TRIMS ESTIMATES DESPITE SOLID FIRST HALF
Byline: Samantha Conti
MILAN — Prada Group sales rose 24.9 percent to $799.3 million in the first half, fueled by the twin engines of Prada and Miu Miu, which accounted for 79 percent of total sales in the period.
The second half, however, won’t be as rosy: Prada chief Patrizio Bertelli said in a statement he was forced to lower the group’s year-end projections due to the terrorism in the U.S. last month.
“The brilliant results in the first half…show the strength of the Prada Group labels and validate our strategic choices,” Bertelli said in the statement. “July and August were in line with our predictions. Today, even though the tragic events of Sept. 11 have forced us to lower our sales projections, we remain confident about the quality of our strategies and the potential of our brands.”
The group, however, did not supply any year-end projections in the statement. In 2000, group sales grew 56.6 percent to $1.39 billion. As reported in WWD, sales at Prada’s New York stores plunged 40 percent after Sept. 11, while in Los Angeles sales dropped 20 percent.
Besides Prada, the group owns Jil Sander, Church’s, Helmut Lang, Genny, Byblos, Car Shoe, Azzedine Alaia and Fendi, via a joint venture with LVMH Moet Hennessy Louis Vuitton.
The statement said 47 percent of sales in the period ending June 30 came from Europe.
Sales of Prada and Miu Miu alone rose 16.4 percent to $630.9 million. Dollars are converted from euros at the current exchange rate. The statement said the growth was due in part to a 40 percent spike in clothing sales and the expansion of the Prada Sport collection.
Earnings before interest, taxes, depreciation and amortization — considered an indicator of profitability — for Prada and Miu Miu rose 43.7 percent. Group EBITDA rose 22.4 percent. The group’s gross margin rose 31.2 percent “despite the sharp rise in the cost of some raw materials,” the statement said.
The company did not release profit figures.
After the attacks in the U.S., Prada postponed indefinitely an initial public offering that was slated for this fall, citing rising international tensions and uncertainty of the world economy and financial markets.