Prada: first quarter up 22% driven by Miu Miu and the retail channel
Prada is starting the year in style. The Italian luxury group saw its sales soar by 22% in the first quarter, reaching 1.065 billion euros, thanks to the increased visibility of its brands, particularly Miu Miu, an acceleration of its retail sales and strong growth in Asia-Pacific, notably with the recovery in China.
The company, which also owns Car Shoe and Church's, is highlighting the success of its core brands Prada and Miu Miu, whose visibility has increased further in the first quarter. The former, which is designed by Miuccia Prada with Raf Simons, "continued to consolidate its strong desirability" driven by the autumn-winter 2023/24 shows and a series of initiatives, including the launch of the Eternal Gold jewellery collection, and in-store activations, the company said. Over the period, its retail sales increased by 21% at constant exchange rates.
The Miu Miu line, led by Miuccia Prada, saw its retail sales accelerate, jumping 42% at constant exchange rates, thanks to a remarkable fashion show in Paris, but also thanks to excellent results following the second launch of New Balance sneakers for Miu Miu, and an expanded leather goods offer, accompanied by the launch of the new Pocket bag.
The direct distribution channel now accounts for the vast majority of Prada Group's revenues with a turnover of 953 million euros in the first three months of the year, up 22% compared to the 14% increase recorded in the fourth quarter of 2022. This growth is due to the development of full-year like-for-like sales. In terms of categories, this translated into a 14% increase in retail sales at constant exchange rates for leather goods, 38% for ready-to-wear and 20% for shoes.
In this context, the group wants to focus again this year "on the retail channel and on increasing productivity in the shops," says the group's new CEO Andrea Guerra, adding that the company will continue to invest in its brands, its sales network and its structure. Revenues from the wholesale channel, on the other hand, only amounted to 91 million euros (+9%) over the period, while the royalties received by the group rose from 14 million in the first quarter of 2022 to 21 million a year later, recording a 52% jump.
In general, the manager was pleased with the "positive start to the year." "During the first quarter, China once again became one of the growth drivers, generating a clear recovery in sales in the Asia-Pacific region," he said in a statement, while chairman and executive director Patrizio Bertelli underlined "the solid growth in all product categories and geographical areas," saying he was confident for the future.
In detail, Asia-Pacific, which is the Prada group's main market, recorded 360 million euros in retail sales, up 22%, benefiting from the recovery in China following the lifting of anti-Covid measures and a further acceleration of sales in that country towards the end of the quarter, the company said. In addition, retail sales in Japan alone, worth 113 million euros, soared over the period (+44%), thanks to investments in the shop network, but also to the influx of tourists and strong demand from local customers.
In Europe, the Italian house continued to make progress with retail sales of 259 million euros, up 26% compared to the first quarter of 2022, again driven by strong local customers and a return of tourists. In the Americas, the Prada group saw retail sales increase by only 10% (+5% at constant exchange rates) to 158 million euros, and in the Middle East by 30% to 39 million.
Prada's first quarter was more than satisfactory, in line with the quarterly results of the other big luxury names, from LVMH to Hermès, which suggests a positive year for the group, which hopes to exceed 4.5 billion euros by the end of 2023.
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