By Andrea Figueras
Prada posted an increase in revenue for the first nine months of the year, buoyed by the popularity of its Miu Miu brand, and continues to buck a downturn in demand for high-end goods that is particularly acute in China.
The Italian luxury fashion firm, home to its namesake brand and Miu Miu, said Wednesday that it booked revenue of 3.83 billion euros ($4.14 billion) for the period, up 18% at constant currency compared with the same months last year. In reported terms, revenue rose 15%.
For the third quarter alone, retail sales at Prada jumped 2% on year, while those of Miu Miu more than doubled, both at constant currency.
"Prada recorded a solid performance, showing resilience against sector headwinds, and Miu Miu upheld its thriving growth momentum," Chief Executive Andrea Guerra said.
The company's results come just one day after Moncler reported a decline in revenue for the third quarter, citing lower demand in Asia and Europe. The Italian maker of high-end puffer jackets had until then been one of the few luxury brands that managed to weather challenges in Asia.
In the Asia-Pacific region, which includes the all-important Chinese market, Prada experienced a 12% increase in retail sales at constant exchange rates.
The group has benefited from the success of its Miu Miu brand, which is particularly popular among Asian consumers. The label, founded in 1993 by Prada designer Miuccia Prada, caters to a younger clientele and is known for its crop-tops, miniskirts as well as Wander and Arcadie bags.
Prada's results contrast with the performance of some of its peers in the region, marked by a slowdown in sales of high-end fashion and accessories in China, as the country suffers from an economic malaise.
Luxury names have traditionally relied on Chinese consumers to fuel their fortunes. But now, these shoppers, particularly those less affluent, have become more thrifty due to the country's economic woes.
Earlier this month, luxury behemoth LVMH -- which houses some of the industry's most high-end brands including Louis Vuitton and Dior -- said it experienced a further deterioration in trends among Chinese consumers.
In Japan, where other luxury brands flagged a sales boom during the past reporting season, the company recorded a 53% rise in retail sales at constant currency, driven by strong demand from both local consumers and tourists.
The country experienced a surge in demand for pricey fashion and accessories, especially from tourists, who seized on the weak yen to snap up cheap luxury goods. After the boom, many luxury brands pushed through price hikes in the country, as a depreciated yen diminished the benefit for companies when converted into dollars or euros.
Last week, French luxury group Kering, owner of Gucci, Balenciaga and Yves Saint Laurent among other high-end labels, said the price gap between Japan and other countries was becoming less attractive for consumers.
The current luxury landscape is shaped by strong polarization trends, with Prada being one of the top players, aided by Miu Miu's success. Other brands that are faring better are Hermes and Brunello Cucinelli, both of which target the wealthiest shoppers, who have been less impacted by the economic downturn and continue to lavish on luxuries.
Prada continues to target solid, sustainable and above-market growth, despite the current challenging backdrop. "We are confident in our ability to navigate the industry complexities," the CEO said.
Write to Andrea Figueras at andrea.figueras@wsj.com
(END) Dow Jones Newswires
October 30, 2024 09:25 ET (13:25 GMT)
Copyright (c) 2024 Dow Jones & Company, Inc.
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