PRADA’S CHANGE OF PLANS:  Prada SpA said Wednesday it would no longer distribute a dividend this year, contrary to a previous decision made last month.

The board of the Italian fashion group, which is publicly listed on the Hong Kong Stock Exchange, recommended the allocation at the next shareholders’ meeting, scheduled for May 26, of the entire 2019 net income to the reserves of the company.

“Due to the current global financial crisis caused by the widespread COVID-19 pandemic, the board of directors has made this decision to allow the Prada Group to access further resources to rapidly go back to its previous activity levels in the next months,” said the company in a statement.

The Italian luxury fashion house delivered improved results last year, registering an acceleration in the second half that continued until the end of January, when it was interrupted by the health emergency.

As reported, last year net earnings rose to 256 million euros, lifted by the Patent Box tax benefit for the 2015-19 period, and compared with 205 million euros in 2018.

Revenues totaled 3.22 billion euros, compared with 3.14 billion euros a year earlier.

Following what chief executive officer Patrizio Bertelli defined as a “very buoyant” start of 2020 for the group, the coronavirus spread interrupted this upward trajectory. “This is a huge and unprecedented event that will draw deeply on our sense of responsibility. Our full concern and support go to the people who are facing these tough times. The safety and the well-being of our colleagues as well as of our customers all over the world are of the greatest importance to us and we will do everything we can to help overcome this crisis together,” said Bertelli, commenting on the year-end results. “Although it is difficult to forecast the evolution of the epidemic, we are expecting a negative impact on this year’s results and we are implementing a comprehensive contingency plan to mitigate it, relying on our flexible supply chain and lean organization. The soundness of our financial structure gives us the confidence to overcome this exceptional moment and to be ready to capture the recovery when it arises.”

As reported, Prada has converted the production of its Montone, Italy-based factory to supply 80,000 medical overalls and 110,000 masks to health-care personnel, upon a request received by the Tuscany region. The initiative followed the donation of six intensive care units made on March 16 by Bertelli and Miuccia Prada, along with chairman Carlo Mazzi.

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