Retail in Asia

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Prada to benefit as Chinese buyers turn “sophisticated”

As the high-end Chinese consumer becomes more discerning in a slowing luxury goods market, analysts say Hong Kong-listed Italian fashion house Prada can face up to the challenge given its attractive product mix and store expansion plans, forecasting huge gains for the company’s stock over the next 12 months.

Erwan Rambourg, Head of Consumer Brands Research at HSBC, says as consumers in China – the second-largest market in the world for luxury goods after the US – become more "sophisticated" and "demanding", Prada’s product range that includes pure leather bags and smaller logos, is turning out to be more appealing than those of competitors Louis Vuitton and Gucci.

China, Prada’s largest market, accounted for 30 percent of overall global sales in the fiscal year that ended in 31 January 2012. Revenue from "like-for-like" or existing stores in China grew 40 percent for the Milan-based retailer last year compared to 16 percent in North America.

(Source: CNBC)