Prada Sales Suf­fer Due to Strong Euro Hit

Perfect Sourcing - - International News -

The Italy-based, Hong Kong-listed lux­ury brand said over­all net sales fell 5.7% on a con­stant ex­change rate ba­sis in the six months to the end of July to €1.47 bil­lion ($1.77 bil­lion).net profit fell 18.4% to €115.7 mil­lion at the firm that also in­cludes the Miu Miu, Church’s and Car Shoe brands. Sales in Europe fell by 7.7%, or 6.6% on a con­stant ex­change rate ba­sis, with only its cloth­ing lines buck­ing the down­ward trend, which is a prob­lem as mar­gins are higher for bags and shoes.

The brand blamed the stronger euro at the end of the pe­riod which af­fected tourist spend­ing on shop­ping.

China’s crack­down on cor­rup­tion and too-conspicuous con­sump­tion had hit lux­ury sales for many brands in re­cent years. But while Prada’s ri­vals have shown quick re­cov­ery, the brand con­tin­ued to strug­gle. Some have sug­gested the prod­uct has lost its “the must-have” tag. How­ever, re­cent col­lec­tions have been well re­ceived and its os­trich feather trimmed cloth­ing ap­pears to have been a suc­cess, as higher cloth­ing sales in the pe­riod show.

But sales of leather goods took a hid­ing in the first half, drop­ping 7.9%, and footwear sales that had pre­vi­ously been a bright spot stum­bled 9.5%. With lux­ury sales ex­pected to rise around 2% this year and Gucci en­joy­ing a near-50% in­crease, some brands were al­ways go­ing to find that their share of the lux­ury cake would shrink and it seems Prada is fac­ing this re­al­ity.

Newspapers in English

Newspapers from India

© PressReader. All rights reserved.