Sales are up at Prada, with the Milan-based brand reporting that revenue for the first half of the year grew by 60 percent at constant exchange rates to 1.5 billion euros ($1.78 billion), and up by 8 percent compared to the same period of 2019, results that have enabled the brand to beat analyst expectations of 1.44 billion euros. In a release on Thursday, Prada pointed to double-digit growth in the Asia Pacific, America and the Middle East regions compared with 2019. “Europe recovered quickly with the re-openings thanks to robust demand from local customers,” while Prada revealed that sales in Japan “continued to be impacted by store closures following new lockdowns.”
Breaking down its individual brands, Prada reported that it saw “very sharp” two-year growth in sales for its namesake label – which generates 86 percent of the group’s revenue. Prada’s sales were up by 13 percent compared to H1 in 2019 and 64 percent compared to H1 in 2020, with “all categories” driving growth. At Miu Miu – which sees 13 percent of the groups’ sales – revenue as actually down by 8 percent compared to H1 in 2019 but up by 43 percent compared to H1 in 2020.
Prada management stated in a corresponding conference call that the group is committed to “further unlocking the Miu Miu brand’s position,” according to a note from Bernstein analyst Luca Solca, who says that it “will extend the collections to other markets based on the success in China and Korea.”
In terms of its revenue by category, Prada revealed that sales in all categories are above 2019 levels, with sales of leather goods, which account for 55 percent of its total revenue, up by 4 percent during the first half of 2021 compared to the same period in 2019 (and up 51 percent compared to H1 in 2020). Prada noted that its leather goods sales are “well balanced growth across iconic and new lines.” Ready-to-wear sales, which are contribute 26 percent of total sales, were up by 24 percent compared to H1 in 2019 and 71 percent compared to H1 in 2020, with Prada noting an “outstanding performance for Prada and Miu Miu collections.”
Finally, footwear sales – which account for 17 percent of total sales and where Prada says that it is seeing “high demand for lifestyle and new collections” – were up by 5 percent compared to H1 in 2019 and 77 percent compared to H1 in 2020.
Highlighting e-commerce, where sales increased by triple-digits compared with the same half in the previous year, Prada says that the channel accounts for 7 percent of all retail sales. It also revealed that during the first half of 2021, an “average of 17 percent” of its store network was closed. Meanwhile, the group reported that its wholesale sales were down by 37 percent for the first half of 2021 compared to 2019, which it says is consistent with its increasingly “selective approach” and its larger move to “increase brand momentum and profitability.” In furtherance of this aim, Prada asserted that it has “continued to strengthen and invest in its brands, through strict control of the distribution channels on-line and off-line, enhancement of the product offer and a further improved customer experience.”
On the profitability front, things are looking up for Prada, with its gross margins at “a record high driven by a favorable channel mix, full price sales, and successful product elevation.”
In a statement on Thursday, Prada Group CEO Patrizio Bertelli said, “The commitment to our brands and stronger ties with our customers have delivered robust growth in sales across markets and product categories. 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. I look forward to updating the market on this and other topics at a Capital Markets Day that will take place in the autumn.”
And worthy of note, Bertelli and wife Miuccia Prada’s son, Lorenzo Bertelli participated in a presentation alongside his parents and Prada CFO Alessandra Cozzani on Thursday. TFL’s sources say that the ambitious Lorenzo, 33 – who joined the Prada Group board this spring and has served as the company’s Marketing Director and Head of CSR since 2018 – could succeed his father in the top spot within as a few as two to three years from now.