Prada sales rise as markdowns capped
Prada sales rose 2 per cent in the first half of the year, as improving full-price sales and a solid growth in its wholesale channel offset the impact of a move to cut back on markdowns.
The Hong Kong-listed Italian luxury fashion group said this year it would stop offering end-of-season promotions in its stores and be more selective with wholesalers to support full-price sales to lift margins and protect its brands.
Prada sales had risen last year for the first time in four years, helped by a new strategy aimed at rejuvenating the brand, which focused on renovating shops, new products and digital sales.
In the first half of 2019, revenue totalled US$1.73 billion, which was flat when stripping out the impact of currency swings.
The retail network declined 3 per cent affected by the phase-out of markdown sales, while the wholesale channel rose 14 per cent driven by online sales, with the rationalisation not having any impact yeton that part of the business.
Prada warned however it will affect results in the short-term.
Operating profit, or earnings before interest and taxes (EBIT), decreased 13 per cent to US$166 million, equivalent to 9.6 per cent of sales. The group’s operating profit margin has been declining every year since 2012 when it stood at 27 per cent.
- Original reporting by Claudia Cristoferi. Editing by Keith Weir.