Continuing volatility in the market and the exchange rate landscape in Hong Kong, Macau and the Asia Pacific region (excluding Japan) has been blamed for Prada’s overall net profit fall of -23% to €188.6m ($212.7m) in the first half of 2015.
Despite the big challenges in the Asia Pacific region which is Prada’s biggest market, the Milan-based fashion company first half-year revenue growth of +4.2%, thanks to more positive market performances in Europe, The Americas, The Middle East and Japan.
Consolidated net current exchange rates on the corresponding period in 2014.
The luxurygoods company says the increase is entirely attributable to the retail channel, as a result of its selective strategy aimed at further enhancing the of its Directly Operated Stores.
All other regions reported good growth, although the company adds that the Asia Pacific market (excluding Japan) showed the same negative trend as it did in the first quarter of the year, offset by a positive effect.
Patrizio Bertelli, COO said: “The luxury goods market is undergoing a period of significant change which must be met with a far-reaching, long-term strategy.
“Our commitment remains centered on creative dynamics and the spirit of innovation, so that we can constantly increase the levels of excellence of our products.
“In operational terms, we will continue with our thorough review of business processes in order to make them more efficient.”
While its wholesale business declined by 13%, sales of the group’s retail network grew by 7.6% at current to €1,552.4m ($1,750.7m). The company reported that its 605 Directly Operated Stores (DOS) also benefited from a general improvement in sales performance.
The European market grew by +12.4% thanks to a steady flow of tourists, together with a recovery in consumption by domestic customers, while the Japanese market outshone the rest of Asia with a +11.7% constant result. Sales in the Americas and the Middle East also improved considerably (both plus +15%).
In terms of retail channel by brand, Prada recorded a 5.4% rise in sales thanks entirely to the effect, but was badly impacted by the negative economic situation in the Asian market.
Miu Miu grew with revenues up at both current (+18.7%) and constant (+6%), enjoying a sales boost in the second quarter. The Church’s shoe business also grew by +18.6% and Car Shoe’s result was in line with the same period last year.
EBITDA for the first half of the year was €440.1m ($496.3m) or 24.1% of net revenues, while EBIT came in at €293.2m ($330.7m) or 16.1% of consolidated net revenues.
As mentioned, was reported down -23% at €188.6m ($212.7m) or 10.3% of consolidated net revenues.