Prada’s revenue rose two per cent in the first half of the year. Operating profit, or earnings before interest and taxes, decreased 13 per cent, equivalent to 9.6 per cent of sales. The group’s operating profit margin has been declining every year since 2012 when it stood at 27 per cent. Sales had risen in 2018 for the first time in four years helped by a new strategy aimed at rejuvenating the brand which focused on renovating shops, new products and digital sales. Improving full-price sales and a solid growth in its wholesale channel offset the impact of a move to cut back on markdowns. Prada, founded in 1913, is an Italian luxury fashion house specializing in leather goods such as handbags, shoes, and small fashion accessories which include wallets, pouches and belts, with a range of ready-to-wear items like shirts, jackets and knits.
The retail network declined three per cent, affected by the phase-out of markdown sales, while the wholesale channel rose 14 per cent, driven by online sales, with the rationalisation not having any impact yet on that part of the business.
The Italian fashion company will stop offering end-of-season promotions in its stores and be more selective with wholesalers to support full-price sales to lift margins and protect its brands.
