Leather sales help Prada’s revenues from falling further

Worldwide
Published:  14 February, 2017

Total consolidated revenue in fiscal 2016 for luxury Italian fashion and leather goods group Prada totalled €3.18 billion, down 9% at constant exchange rates (-10% at current exchange rates), but both the footwear and leather goods divisions reported improved results throughout the entire second half of the year.

According to the preliminary sales figures for fiscal 2016 published by Prada, sales in the Asia Pacific region were down -12% at constant exchange rates, but recorded a “very dynamic second half”. China is reported to have resumed rapid growth in the third quarter, while Hong Kong and Macau saw “reduced level of sales contractions” compared with past years. Greater China reported higher sales in the last quarter of the year.   

The European market recorded a 5% drop in sales at constant exchange rates, and was adversely affected for most of the year by the reduction of tourist flows, especially in Italy and France, although France showed clear signs of recovery in the fourth quarter, according to Prada. However, double-digit growth was recorded in Russia and in the U.K., which “reversed the decline of the first six months to end the year with strong growth.”

Sales in the American market was down -12% in the year at constant exchange rates, attributed to a continued fall in tourist flows to the U.S., whereas Mexico and Brazil are reported to have had positive growth.

According to Prada, after five years of consecutive growth, sales declined 13% in Japan at constant exchange rates, essentially attributed to the reduced flow of tourists from China, due in part to the yen appreciation. As for the Middle East, a 10% decrease in sales was recorded at constant exchange rates compared to the prior fiscal year.

The footwear and leather goods divisions reported improved results throughout the entire second half of the year, seen as a positive response to the latest collections.

“This past year we implemented a profound phase of business process rationalisation, still underway, and identified important strategies to secure the Group's future growth”, said Patrizio Bertelli, CEO, Prada in a statement. “This included revising our digital strategy with the creation of a highly skilled team with professional experience from the digital technology and new media industries. In the meantime, we are strengthening the retail management structure with the aim of integrating online channels with traditional channels in a truly innovative dimension”, he added.

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