Italian luxury fashion house Prada reported retail sales up 60 percent versus H1-2020, showing a strong acceleration in the second quarter.
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Prada Group’s strategy of investment in its brands has delivered profitable growth, with sales well above 2019 levels, despite the ongoing effect of the pandemic. Profitability has been driven by full price sales together with disciplined management of operating costs, resulting in an EBIT at above pre-Covid levels and strong operating cash flow generation.
The Prada Group has continued to strengthen and invest in its brands, through strict control of the distribution channels online and offline, enhancement of the product offer and a further improved customer experience. Highly acclaimed Spring/Summer and Fall/Winter fashion shows continued to grow visibility and engagement online. A strong commitment to ESG values remains at the core of the company strategy and we will disclose the Sustainability Roadmap to the market in the autumn.
During the first half of 2021, around 17 percent on average of the store network was closed. Nevertheless, the retail channel delivered sales of US$1,522 million in the period, with trend improving constantly quarter after quarter. In Q2-2021, sales improved over Q2-2019 with double-digit growth. The Group expects growth to continue. Online sales continued to make a strong contribution with triple-digit growth.
Sales in Europe were impacted by the high levels of store closures (36 percent on average), but once stores re-opened, they partially recovered. Robust demand from local customers partially offset the lack of tourists. Asia Pacific performed very well, showing strong double-digit growth in both quarters over 2019. Consumer demand was particularly strong in key markets compared with H1-2019: Mainland China (+77 percent), Taiwan (+74 percent) and Korea (+108 percent).
Americas showed a significant improvement, driven primarily by local consumers, with strong performance across all countries. In Japan revenues suffered due to restrictions imposed by the government ahead of the Olympic games. The Middle East kept on growing, driven mainly by local consumption and a somewhat increased inflow of tourists. E-commerce delivered an outstanding performance with a sales increase that was once again in triple-digits compared with the same half in the previous year. The channel now accounts for 7 percent of retail sales.
With the aim to preserve its brands’ positioning, the Group focused on developing retail sales. The Wholesale sales stood at US$232 million, down 37 percent compared to H1-2019.
Patrizio Bertelli, Chief Executive Officer of the Prada Group, commented, “The commitment to our brands and stronger ties with our customers have delivered robust growth in sales across markets and product categories. We improved gross margin as well as the Group’s profitability, despite the uncertain environment. The sales momentum will stay strong in the second half of the year. Our brands have plenty of potential and we will unlock it over the medium term. I look forward to updating the market on this and other topics at a Capital Markets Day that will take place in the autumn.”