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Prada’s result hit by bad performance in Asia
2015/4/14 8:56:13 Source: worldfootwear Author: 点击率:
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Prada suffered a 28% fall in net income last year as the Italian fashion giant was hit by weaker sales of its luxury products in Asia.

Consolidated net revenues for Prada in 2014 totaled 3 551.7 million euros, slightly down on 2013, -1.0% at both current and constant exchange rates.

The group has been focusing in the retail channel for several years, so the 3.4% decrease (-4.7% at constant exchange rates) in wholesale sales doesn’t come as a surprise for Prada.

As at the 31st of January 2015, the Group’s retail network consisted of 594 DOS (Directly Operated Stores) and sales through this channel totaled 2 980.9 million euros, broadly in line with 2013 at both current and constant exchange rates. Significant variations occurred in different geographical areas: the growth recorded in Japan, the Americas and the Middle East was eroded by a fall in sales in the Far East, where market conditions gradually deteriorated in the second semester.

In Europe, sales decreased by 1.1% compared to the prior year, mainly driven by a reduced flow of tourists and continuing weakness in domestic demand. However, the trend improved in the final quarter of the year with a return to growth.

In the fourth quarter, the American market confirmed the good performance already shown in the rest of the year. For the entire fiscal year, it recorded a +7.7% increase at current exchange rates (+7.2% at constant exchange rates) thanks to strong domestic demand.

The situation in Asia Pacific area was somewhat more difficult and it recorded a 5.5% drop in sales at current exchange rates in 2014 (-6.5% at constant exchange rates). The sales contraction in this area was the result of a weak performance of Hong Kong and Macau where market conditions deteriorated significantly in the second half of the year. In addition, the different timing of the Chinese New Year affected sales performance in the month of January throughout the Greater China area.

Japan continues to grow and performed well again in the fourth quarter. Sales growth for 2014 as a whole was +7.7% at current exchange rates (+13.3% at constant exchange rates). In the Middle East, sales grew by a 9.9% at current exchange rates (+8.5% at constant exchange rates) despite a fall in the number of Russian tourists.

In 2014, the Prada brand, which now accounts for 83% of consolidated net revenues, recorded a 1.7% decrease in sales at current exchange rates (-1.5% at constant exchange rates). Performance varied from one geographical area to another, along the lines of total sales revenue. Men’s collections achieved growth in all geographical area.

Miu Miu achieved 4% revenue growth at current exchange rates in 2014 (+4.4% at constant exchange rates). Except in Europe, the brand recorded good rates of growth on all markets, including the Far East.

Church’s also performed well with +14.8% revenue growth at current exchange rates (+12.0% at constant exchange rates), as did Car Shoe with +12.2% growth at current exchange rates (+11.0% at constant exchange rates).

Net income, amounting to 450.7 million euros and down by 28% fromt he previous year, represented 12.7% of consolidated net revenues.

Patrizio Bertelli, Chief Executive Officer of Prada Spa, commented: “As already highlighted, the financial year 2014 represented a year of transition for the Prada Group on its journey of growth. Operating profit slowed down temporarily after the Group preferred to take a medium/long-term view with the continuation of its investment program. Our balance sheet and the operating cash flow generation remain strong and enable us to confirm our investment plans in production and research, while also optimizing the retail network. The next challenges will regard our ability to adapt to the rapidly evolving market and we are confident to face this challenge leveraging on the strength of our brands and on our innovative capacity which has always made the Group stand out”.

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