According to Prada, financial market volatility and socio-political risks affected customer spending. Additionally, the devaluation of the renminbi/yuan between August and September 2015 had a negative impact on the purchases made by the Chinese travellers; mainland Chinese tourists have increasingly turned to other destinations such as Japan and South Korea for luxury shopping as the weak yuan makes goods more expensive in Hong Kong as well.

Company posted results on Tuesday (December 15) show that net income dropped to EUR46.48 million for the three months ended Oct. 31, compared to EUR74.47 million for the same quarter a year earlier, and to EUR129.8 million in the second-quarter. Net revenue fell 5.3%, while sales of higher-margin leather goods decreased 11.6%.

Patrizio Bertelli, Prada’s CEO, announced the company has “implemented further cost-containment measures following a review of all business processes” as net profit for the nine months to October 2015 fell 26.4% to EUR235.1 million.

As reported by ILM, like other luxury brands, Prada has been closing retail shops around China, reducing the number from 49 to 33.

Sources: France24/Reuters