Prada Group’s retail sales accelerated at year end, rising 17 percent in the fourth quarter, the Milanese fashion giant reported Thursday. Analysts had predicted 14 percent growth.
Retail sales at flagship label Prada grew 10 percent while sister label Miu Miu posted explosive growth: fourth quarter sales jumped an eye-popping 82 percent.
For the full-year, net revenues rose by around 12 percent to €4.73 billion, breezing past the mid-term target of €4.5 billion set out by management in 2021. Operating profit rose 37 percent, surpassing €1 billion for the first time.
Prada’s fashion prestige has steadily risen since going global with its nylon rucksacks and ready-to-wear collections by owner-designer Miuccia Prada in the early 1990s. But the business stagnated for nearly a decade as a craze among Chinese customers for its Galleria handbag fizzled.
In 2022, revenues climbed back above their 2013 peak for the first time after Miu Miu saw a surging interest in its newly striking, skimpy silhouette and as Prada re-merchandised its core wardrobe, complementing its directional runway looks with easy-to-wear daytime pieces.
Prada’s continued growth amid today’s slowing luxury market could ease pressure on the company’s generational change: a new group CEO (Andrea Guerra), CFO and Prada brand- CEO have been brought in to help ease the succession of longtime leaders Patrizio Bertelli (now executive chairman) and Miuccia Prada, who plan to eventually pass the baton to their eldest son Lorenzo Bertelli. Mrs. Prada has worked in tandem with a co-creative director, star designer Raf Simons, since 2020.
The news that the Italian group has continued to beat the market suggests that growing consumer fatigue with logo-ed products applies unevenly across brands and market segments: the lion’s share of Prada’s product remains emblazoned with its inverted triangle motif or the bubbly lowercase Miu Miu mark. Louis Vuitton, too, proved resilient last year while many logo-driven brands with higher exposure to aspirational customers, like Capri’s Versace and Kering’s Gucci and Saint Laurent, slowed.
At Prada, dependence on entry-level luxury consumers — whose interest in luxury fashion has cooled amid a slowing economy and the return of travel and restaurants following the end of coronavirus restrictions — also seemed like a key risk. Efforts to rebalance the business to capture a more elevated customer, insulated from macroeconomic shocks and able to buy deeply into collections, appear to have paid off.
