: weak growth in H1 Prada
Prada slowed down in first half of 2014. The Italian luxury group achieved a turnover of 1.75 billion euros over the period from February to July, recording a slight increase of 1% compared to the same period in 2013, according to a statement released with the publication of its preliminary interim results. "Performance in the six month period was conditioned by unfavorable exchange rate trends,” said the company, which noted that sales were up 4% at constant exchange rates.
The results, however, have remained below those projected by the company, which counted on an annual growth rate of 6 to 9% supported by its 2014-2016 industrial plan. In fact, the head of Prada, Patrizio Bertelli, warns "in light of the results achieved in the first half of the year and with a clearer view of the outlook for the months ahead – [the board of directors will] update its guidance for the year as a whole,” next September, when the complete and definite interim results are approved.
The group, which, beyond its main ready-to-wear brand Prada, holds the luxury clothing line Miu Miu and the footwear brands Church's and Car Shoe, said that in recent months it has operated in “a more difficult political and macroeconomic environment than expected with unfavorable exchange rates and a general fall in consumption."
Both the luxury group’s wholesale and retail channels - retail generating 83% of total business through 566 directly managed stores - recorded the same 1% growth rate.
At constant exchange rates, the former channel rose by 2% to 288 million, and the latter by 5% to 1.442 billion euros.
The group’s most promising markets were in the Americas (+8%), Japan (+10%) and the Middle East (+16%). However, Prada’s sales were down in Europe (-1%) and in the Asia Pacific (-2%) despite growth in China.
"In the coming months, our priority commitment shall be towards monitoring market trends and performance without, however, interrupting the implementation of our plans for growth. At the same time, we will implement a rigorous cost control program with the aim of protecting margins," said Bertelli.
Complete results for the first half will be announced on September 19.
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