Listen to the article 4 minutes This audio is automatically generated, please let us know if you have any feedback.
Dive Overview:
Prada Group announced on Tuesday that its first-half net revenues rose 14% year-over-year to 2.5 billion euros (about $2.8 billion). Miu Miu continued to lead the company’s retail sales, up 93% year-over-year in the first half and 95% in the second quarter, while Prada was up 6% for the first half. Global retail sales increased 15% in the first half, with Japan leading regional growth with a 38% increase “supported by healthy local demand and strong tourist flows,” according to the release.
Dive Insights:
The earnings gap between luxury brands continues to widen as some thrive and others struggle during a tough period for the luxury fashion industry. Kering, Burberry and LVMH all reported declines in earnings earlier this month, which they blamed primarily on China’s overall economic slowdown.
In contrast, Hermes bucked the trend, growing in all regions and posting a 12% increase in revenue in the first half of the year.
As Prada Group’s growth continues to show upward momentum, Chairman and Executive Director Patrizio Bertelli said the strong first half performance “reflects the strength of our brands and the disciplined execution of the company’s strategy.”
“We are pleased to have delivered an above-market performance and a quality comparable growth trajectory amid an increasingly uncertain market environment,” Bertelli said in a statement. “The flexibility of our organization gives us confidence in the group’s ability to navigate the coming months as we continue to invest across our businesses.”
The company said sales in Asia Pacific grew 8% in the first half despite tough comparatives and increased spending outside the region. In Europe, sales increased 17% driven by spending by both locals and tourists. The Americas grew 7% and sales in the Middle East increased 20% “despite ongoing geopolitical tensions in the region,” the company said.
The company said its namesake brand, Prada, had a strong first half of the year with the launch of its new Galleria bag and a new advertising campaign for its ReNylon collection.
Meanwhile, buzz around the Miu Miu brand was fuelled by the expansion of the brand’s upcycling program and the launch of its Miu Miu Literature Club, the release said.
The two brands have been competing with LVMH-owned Loewe for the top spot on the Lyst Index, which ranks the world’s most popular products and brands based on shopping behavior. Loewe recently took the top spot for the second quarter, while Miu Miu and Prada took the first and second spots, respectively, in the first quarter.
“The group delivered its 14th consecutive quarter of quality year-on-year growth, with the second quarter continuing a strong start to the year,” CEO Andrea Guerra said in the release. “Prada remains on a healthy trajectory and Miu Miu demonstrated strong performance, with both brands leveraging their unique identities, creativity and positioning.”
Guerra added that the current macroeconomic and geopolitical situation makes the industry’s outlook more challenging, but he remains optimistic.
“We remain vigilant and continue to execute on our strategy and ambition to deliver solid, sustainable and above-market growth,” Guerra said.
