Prada posts de­clin­ing rev­enue while re­struc­tur­ing con­tin­ues

Shoes & Accessories - - The Month That Was -

“The com­plex task of re­struc­tur­ing our op­er­at­ing pro­cesses, which is aimed at pro­vid­ing the group with the tools needed to ac­cess an in­creas­ingly com­pet­i­tive mar­ket, is pro­gress­ing well; how­ever, more re­mains to be done. Our dig­i­tal trans­for­ma­tion con­tin­ues apace, en­hanced by the launch of e-com­merce in all mar­kets, in­clud­ing China”. Net rev­enue posted by Prada for the first half of the cur­rent fi­nan­cial year to­taled 1 469 mil­lion euros, a de­cline of 5.5% (5.7% at con­stant for­eign ex­change) com­pared to the same pe­riod in 2016. In ge­o­graphic terms, Asia Pa­cific bucked the trend with rev­enues in line with the first se­mes­ter in 2016, up by 0.4% (down by 0.6% at con­stant for­eign ex­change). Greater China de­liv­ered a pos­i­tive per­for­mance, with sales up by 5.2% at con­stant ex­change rate and growth also seen across Ma­cau and Hong Kong. The Amer­i­cas mar­ket con­tained the de­cline com­pared with 2016, with sales down just by 3.7% (down by 5.8% at con­stant FX). The Euro­pean mar­ket was down by 7.7% (down 6.6% at con­stant FX), im­pacted by the strength of the euro, es­pe­cially in the sec­ond quar­ter, and by trends of stabilization in the UK mar­ket. Mar­ket con­di­tions in Ja­pan re­mained un­changed, with sales de­clin­ing by 14.2% at cur­rent and con­stant ex­change rates, high­light­ing weak con­sump­tion by both do­mes­tic cus­tomers and tourists. The Mid­dle East reg­is­tered a neg­a­tive trend down 11.7% (down 13.1% at con­stant FX), due to on­go­ing geopo­lit­i­cal ten­sion which im­pacted tourist flows within the re­gion.

The Italy–based com­pany also con­firmed that its cost re­view pro­gram, launched last year and ap­plied to all op­er­at­ing pro­cesses, con­tin­ued to de­liver con­crete re­sults, de­spite the in­creased costs in sup­port of the dig­i­tal and com­mu­ni­ca­tions strat­egy. In­vest­ments for the pe­riod amounted to 105.6 mil­lion euros and were al­lo­cated both to en­hanc­ing the re­tail net­work, where the Group has com­pleted 100 projects aimed at bring­ing the im­age of the stores in-line with new de­sign con­cepts, and to the strength­en­ing of the sup­ply chain to fur­ther de­velop the group’s in­dus­trial and lo­gis­tics ca­pa­bil­i­ties. Prada’s net fi­nan­cial po­si­tion at the 31st of July 2017 was neg­a­tive at 223 mil­lion euros fol­low­ing the pay­ment of div­i­dends amount­ing to 307 mil­lion euros.

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