Prada first half profits down 23%

Prada Group reported today its first half 2015 financials, to 31st July. Prada’s first half profit declined by 23% to 188,6 million euros, with an ebb of 21% in EBIT Prada confirm revenues for the six months ended July 31, 2015 amounted to Euro 1,824.4 million, with a 4.2% increase, at current exchange rates, on the corresponding period in 2014.

Meanwhile, the sales of the Group’s retail network have grown by 7.6% at current exchange rates to stand at Euro 1,552.4 million. On top of the positive exchange rate effect, the 605 Directly Operated Stores (DOS) also benefited from general improvement in sales performance.

The European market has continued to grow with revenues for the first six months of the year up at both current exchange rates (+12.4%) and constant exchange rates (+10.8%) thanks to a steady flow of tourists together with a recovery in consumption by domestic customers.

The Japanese market has also performed extremely well with growth at both current exchange rates (+11.7%) and constant exchange rates (+4.9%); double digit rates of growth were achieved throughout the second quarter.

Meanwhile, the Asia Pacific market shows the same negative trend as in the first quarter of the year, offset by a positive exchange rate effect. Hong Kong and Macau remain the markets which mainly affected the weak performance in this geographical area.

At current exchange rates, sales increased in the Americas and in the Middle East (both by 15%); in the Middle East, performance improved significantly in real terms in the second quarter.

Prada has recorded a 5.4% increase at current exchange rates, entirely attributable to the exchange rate effect, and has been impacted by the negative economic situation in the Asian market. Meanwhile, Miu Miu continues to grow with revenues up at both current exchange rates (+18.7%) and constant exchange rates (+6%) and an acceleration achieved in the second quarter of the year. Church’s has also achieved sales growth (+18.6% at current exchange rates) with the volumes trend also remaining largely positive. Finally, Car Shoe has performed broadly in line with prior year.

Too many new stores and not enough new products have hurt Prada as demand for luxury goods slows in greater China following a clampdown on extravagance. In a bid to reignite sales and reverse a slump in its share price, the company introduced the Inside bag in July, with prices starting at about 2,000 euros. Prada has also slowed this year’s expansion, pledging to open about half the number of stores it did last year.

“The global economic environment is still volatile and recent instability in Asia has not helped ease the situation,” Prada said. Still, the company said it’s “confident” in its ability to adapt as it streamlines operations and reduces costs. The latter include cuts to “discretionary expenses,” according to the statement.

Prada store Las Vegas – Wynn Hotel