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After years of retail expansion, Prada’s 2015 results fail to get back on track for the second consecutive year.
The Italian luxury goods brand, which had reported an 11% slump in revenues in 2014, registered €3.45 billion in total revenue for the year 2015, broadly in line with expectations but slightly below the €3.55 billion recorded in the previous year.
Sales in the U.S. market dropped 9%, excluding currency fluctuations impacted by a strong dollar making purchases more expensive. Sales in Asia Pacific outside Japan fell 4% at current exchange rates and 16% at constant rates.
On the other hand, sales in Europe were up 5% at constant exchange, thanks to a weaker euro and to "a steady stream of tourists, especially from Asia Pacific and the US”.
According to Patrizio Bertelli, Prada’s CEO, whose brands include Miu Miu and Car Shoe, the company had to face “extreme volatility” in currency markets, and “a deteriorating geopolitical situation in many world regions”. "The economic situation in the Chinese market remains negative, although there was some improvement in the final quarter”, the company said in a statement although no quarterly breakdown has been provided.
However, Prada has struggled where other luxury brands such as Dior and Longchamp have succeeded, leading some within the fashion industry to suggest that Prada's problems go beyond global economic and are related to the brand having become associated with conspicuous consumption during China's boom years, and now being re-evaluated by young trend-setters.
Sources: Bloomberg/CCI France Chine