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Prada reports strong H1 sales, swings to profit

By Huw Hughes

30 Jul 2021

Business

Image: Prada

Prada has reported a 60 percent increase in sales at constant exchange rates in the first half of the year in what is the latest sign of the luxury industry’s recovery.

In the six months to June 30, the Italian fashion house reported revenue of 1.5 billion euros, compared to 938 million euros last year when the company was hit hard by international store closures.

Prada reported retail revenue of 1.28 billion euros, up 60 percent compared to a year earlier, and up 8 percent compared to two years ago, prior to the impact of the pandemic. The company said there was a “strong acceleration” in the second quarter.

During the first half of the year, around 17 percent of Prada’s store network was closed on average.

E-commerce sales also performed well, growing by a triple-digit percentage for the fifth quarter in a row. The channel now accounts for 7 percent of retail sales.

Wholesale sales, meanwhile, were down 37 percent compared to 2019 levels to 196 million euros, which the company said was consistent with its approach in developing retail sales to preserve its brands’ positioning.

Prada swings to H1 profit

Prada reported operating profit of 166 million euros, compared to 83 million euros a year earlier, while net income was 97 million euros, compared to a loss of 180 million euros in the prior-year period.

“The commitment to our brands and stronger ties with our customers have delivered robust growth in sales across markets and product categories,” CEO Patrizio Bertelli said in a statement.

“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.”

Prada is the latest luxury label to report strong results in recent weeks, following in the footsteps of giants LVMH, Richemont and Kering which have all seen a surge in sales as shoppers splash out on luxury items after emerging from lockdown.