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Weak Asia Pacific performance impacts Prada’s results

Sep 18, 2015 Italy
Weak Asia Pacific performance impacts Prada’s results
The Italy-based group announced the first half results, market by 4.2% revenue growth at current exchange rates. The first semester was marked by difficulties felt in the Asia Pacific markets
Patrizio Bertelli, Chief Executive Officer of Prada Spa, commented: “The luxury goods market is undergoing a period of significant change which must be met with a far-reaching, long-term strategy. Our commitment remains centered on creative dynamics and the spirit of innovation, so that we can constantly increase the levels of excellence of our products. In operational terms, we will continue with our thorough review of business processes in order to make them more efficient”.

Prada's consolidated net revenue for the six months period ended on the 31st of July amounted to 1824.4 million euros, with a 4.2% increase at current exchange rates, mainly driven by the retail channel, as a result of the selective strategy pursued by the group with the aim of further enhancing the activities of its Directly Operated Stores.

Consequently, wholesale channel sales for the period decreased by 13.8% at current exchange rates and stood at 249 million euros, in line with the ongoing rationalization of the network of wholesale partners.

Prada’s retail network sales have grown by 7.6% at current exchange rates and reached 1 552.4 million euros, reflecting the positive exchange rate effect and the general improvement in sales performance throughout the 605 Directly Operated Stores.

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%), mainly driven by 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.

Moving on to the retail channel by brand, 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.

Net profit stood at 188.6 million euros or 10.3% of consolidated net revenues.

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