After making headlines in connection with its announcement that design icon Raf Simons would join Miuccia Prada as co-creative director for its marquee brand, Prada Group has reported revenue for 2019 of $3.49 billion, up 2.7 percent compared to the year prior. Meanwhile, the Milan-based group, which owns Prada, Miu Miu, Church’s and Car Shoe, boasted profits of $277.8 million, a rise of $24.5 percent from 2018, with retail – as opposed to wholesale – sales up 4.1 percent to $2.85 billion.
Prada revealed in its report on Wednesday that leather goods make up 56 percent of its total revenue, followed by ready-to-wear, which accounts for 24 percent of sales; and footwear at 18 percent of sales. Interestingly, the group’s leather goods sales were down 1 percent for 2019, while its ready-to-wear sales were up by 9 percent, driven by both Prada and Miu Miu collections, according to the report. This is something of a notable takeaway given that most of Prada’s competitors are experiencing growth in their leather goods sales, as opposed to in their garment offerings.
The group pointed to double digit full price sales growth in the second half of the year across all categories for its namesake Prada brand with a particularly “strong performance” from Linea Rossa, which it describes as a collection aimed at reaching a “younger audience with a sporty and lifestyle mindset” by way of “advanced fabrics” and “metropolitan and urban roots.” Meanwhile, Miu Miu experienced “significant improvement” for the second half of the year with “outstanding performance in ready-to-wear” driving strong double digit full price sales for that period.
The year, as a whole – which follows from three years of falling sales between 2014 and 2017 – “featured important strategical decisions that, relying on the innovation and excellence that consumers throughout the world associate with the Group’s brands,” per Prada. In particular, the group pointed to its “complete phase out [of] markdowns,” and its introduction of “more stringent policies to better control digital platforms,” while also highlighting “increased investment in brands and new communication strategies.”
Specifically addressing its overhauled communications efforts, the group noted that “web and social mentions increased [during the year] thanks to environmental initiatives and collaborations (Prada Re- nylon, ESG loan and Prada for adidas).”
Still yet, in terms of retail, Prada stated that for fiscal year 2019, it rolled out “28 pop ups and 28 special in-store installations,” which proved to be significant for “enhanced customer engagement,” and “more than 1,000 store events generating high returns and creating social content and excitement.” This was coupled with “strong flow of product newness and well-received iconic re-editions,” as well as “diversified price points” and “successful collaborations with adidas and other partners.”
Also underway, Prada is in the process of reworking its wholesale strategy. In order to “enhance brand desirability to reach a better relationship with final customers around product value,” it is “reducing allocation to wholesale partners,” and implementing “stricter conditions in terms of geographic areas, volumes and pricing policy” in connection with the wholesale partners it has.
As for the un-ignorable issue that it – and the rest of the fashion industry – is currently facing: Prada notes that “the strong growth seen in [the second half of the year] and up to the end of January 2020 has been interrupted by the Coronavirus outbreak and all Group efforts are now dedicated to overcome this contingency,” stating that while “it is difficult to forecast the evolution of the epidemic, we are expecting a negative impact on this year’s results.”
“Prada is implementing a comprehensive contingency plan to mitigate such effects, relying on its flexible supply chain and lean organization,” it said in a statement.
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