By David Adam Kess (Own work) via Wikimedia Commons
Prada, an Italian fashion brand, has returned to growth across all the key markets of the company, and it is optimistic about a “new chapter” following years of declining sales.
The company is optimistic despite a continuing drop in the sales and profits of Prada.
This afternoon, the luxury brand released its annual results revealing that net revenues were down by two percent to €3.1bn last year. Net profit dropped by more than 10 percent to €249m.
The group said that it was dealing with higher expenses in communications and digital, even though it was making cost savings in some other areas.
Patrizio Bertelli, the chief executive of the company, stated: “The Group’s investment in the store portfolio, in boosting global brand visibility and in the enriched product offer is enhanced by a fast-growing digital presence.”
Slashing the number of markdowns was able to push up full price sales, contributing to making the gross margin healthier at 73.5 percent versus the 72 percent last year.
Sales of leather goods were able to recover, while ready-to-wear clothing led the growth with a 10 percent rise in the sales at constant currency.
The trends were able to accelerate during the second half, giving the group confidence that the company is now entering a new period of recovery.
Bertelli stated: “We are confident that this new chapter, founded on our brands’ cultural heritage and iconic values, will be key to the group’s success in an increasingly complex market.”
However, the brand still has to endure tough competition, especially from Gucci, the Kering-owned Italian fashion house, which increased its sales by 42 percent in 2017.
This morning, in a note on Burberry, RBC Capital analysts noted that millennial consumers have accounted for the majority of the growth of Gucci, making the demographic a principal target for other luxury houses.