Prada experienced a significant drop in sales in the first half of the year, affected by the health crisis.
While analysts forecast a loss of 130 million euros, the Italian luxury group Prada, listed on the Hong Kong stock exchange, recorded a net loss of 196 million euros in the first half of the year, down 40% from February to March and 70% in April.
This was due to the impact of the coronavirus pandemic, which caused the closure of its many boutiques. And of course, the virtual absence of tourism.
The leading Italian luxury group, which not only owns its eponymous brand, but also Miu Miu, Car Shoe and Church’s., has thus recorded a 40% drop in turnover at constant exchange rates over the first six months of 2020, to 938 million euros.
However, the company did not report a decline in sales at current exchange rates.
According to the consensus of the financial information provider Factset Estimates, analysts expected -110 million euros.
Retail sales growth in mainland China was up 60% in June and 66% in July.
The group also saw encouraging signs of recovery in other markets due to the easing of traffic restrictions.
Although it had experienced a difficult period for several years, by 2018 the Prada fashion house had already begun to see its sales recover thanks to a new strategy aimed at attracting younger customers.
“The strong sales growth experienced throughout January was abruptly interrupted by the health emergency. Prada reacted swiftly by implementing cost reduction measures (renegotiation of lease contracts, cancellation of marketing operations, etc.), adapting production (…), reviewing its investment programs and suspending the payment of dividends“. explained the group.
Nevertheless, these measures have “kept the financial situation under control“.
It should also be noted that for the past year, the group has put an end to balances to avoid any loss of value and image.
The result? Since the reopening of the stores, sales have been steadily recovering with significant increases in Asia.
The head of the group, Patrizio Bertelli, said he was confident about the future, saying he hoped that Prada would “gradually resume its growth path by the end of the year, when the sales network will have regained its full capacity“.
E-commerce sales grew by 300% in June and July, the group said.
“The excellent response from local consumers after the reopenings confirms the interest in our products and the strong bond with our customers, reinforced by the potential of digital, on which we will continue to focus“. said Patrizio Bertelli, who leads the group with his wife, the stylist Miuccia Prada.
Read also > DOUBLE-DIGIT GROWTH FOR PRADA SALES IN ASIA
Featured Photo : © Prada
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