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February 14, 2017

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Prada sees China bounce as sales slide

Source: AFP | February 14, 2017, Tuesday | Print Edition

PRADA yesterday reported a 10 percent fall in sales for the year through January but said it was encouraged by a better second-half performance, notably in China’s mainland.

The Italian-based but Hong Kong-listed fashion powerhouse saw sales fall across all regions with revenue in the 12 months to January 31 falling to 3.18 billion euros (US$3.4 billion), down from 3.55 billion euros in the previous financial year.

The overall fall — 10 percent at current exchange rates, 9 percent at constant rates — was broadly in line with hopes for the luxury handbag producer.

The biggest drop was registered in Japan, where sales fell 13 percent after five consecutive years of growth. The company attributed the trend to a reduced flow of tourists from China due in part to the yen appreciation.

Sales for the rest of Asia-Pacific were down 12 percent but Prada said the rate of decline had slowed in Hong Kong and Macau while “rapid growth” resumed in the Chinese mainland from the third quarter.

Europe was hit by a decline in the number of high-end shoppers visiting France and Italy, while Russia, which registered double-digit growth, and post-Brexit Britain bucked the trend.

The British market, subdued in the first half, was helped by a tourism boom fueled by the fall of the pound in the wake of the June vote to leave the European Union.

After several years in the doldrums due to an economic slowdown in China, Prada predicted in August that it would return to earnings and sales growth in 2017 after cutting costs.

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