Prada reports dramatic decline in profit
For the first 9 months of 2014, Prada reports a steep decline of 27% in net profit to 319,3 million euros, compared with the same period last year. Prada’s turnover has remained relatively stable at 2,522 billion euros, a 0,5% decrease compared to the same period 2013. Asia-Pacific has been the worst performing market for Prada in the first 9 months of 2014, with a decline in sales of 4,5% (current exchange rate). Wholesale sales plummeted by 3,7% or 4,2%.
”2014 has been a much more difficult year than expected,” said Patrizio Bertelli, CEO Prada Group. ”We are positive on the outlook for growth in the medium term – continued Bertelli – but we are also aware of the increasing level of complexity” Bertelli added.
Prada has been facing an identity crisis in terms of design, the past 2 seasonal collections being lackluster. The ‘predictable’ style of the advertising campaigns and the poor presence on social media channels must have greatly contributed to Prada’s modest financial performance. The slow down in retail expansion has come rather late, with key markets such as Switzerland where Prada will operate from January 1st 2015 a total number of 11 stores, from its present portfolio of 3 directly operated boutiques. Prada is still absent from crucial emerging markets such as India, Colombia, Chile, Nigeria and South Africa.