Hong Kong weighs on Prada
Falling sales in Hong Kong have eaten into Prada group’s first nine months result, despite an unexpected boost in Japan.
In Asia Pacific, sales decreased 4.3 per cent at current exchange rates and 2.8 per cent at constant exchange rates in the nine months to October 31.
“Sales in the area were primarily conditioned by the Hong Kong market which was already weak in the previous months and deteriorated further in October following the well known facts,” the company said, in an obvious reference to the Occupy Central protests.
“China, the largest market in the Asia Pacific area in terms of sales, has recorded a positive revenue trend,” Prada said in an earnings statement.
Prada group breaks out Japanese sales from the rest of Asia. It said Japan recorded a positive trend and achieved strong growth in the period under review: up eight per cent at current exchange rates and up 15.3 per cent at constant exchange rates.
CEO Patrizio Bertelli said 2014 was proving to be a more challenging year than expected.
“On top of the ongoing difficult international economic environment, the luxury goods market is undergoing a certain readjustment, the extent of which is not yet entirely clear. We are confident in the medium-term growth prospects of the market, but also aware of its increasing level of complexity. Consequently, we remain convinced that we have made the right choice in continuing to prioritise the group’s medium-term development, through investments focused on achieving qualitative and stylistic excellence.
Globally, the group achieved consolidated net revenue of 2.552 billion euro, broadly in line with the same period a year earlier – up 0.9 per cent at current exchange rate; up 0.5 per cent at constant exchange rates.
Wholesale sales were down 3.7 per cent in line with the company’s strategy to develop its directly operated store network.
Sales in Europe were up 1.3 per cent at constant exchange rates, in the Americas up 8.8 per cent, in the Middle East by 11.7 per cent and in Europe fell 1.8 per cent.
By division, Prada sales were up 0.3 per cent, Miu Miu grew 3.9 per cent and Church’s up 13.3 per cent.
Net profit was Euro 319.3 million or 12.5 per cent of consolidated net revenues.