Prada sales rise, boosting hopes of luxury sector recovery

[MILAN] Prada sales rose in the first nine months of year as solid demand for its Miu Miu brand offset a fall at the group’s eponymous label. 

Net sales rose to 4.07 billion euros (S$6.13 billion), a 6.3 per cent increase year-on-year, the Hong Kong-listed company said on Thursday (Oct 23). Sales at Miu Miu, which is particularly popular with younger customers, jumped by 41 per cent in the same period.

Prada has now delivered 19 consecutive quarters of growth, which confirms the “strength of ours brands and the validity of our strategy,” Patrizio Bertelli, Prada group chairman and executive director, said in a statement. 

Expectations for an improvement the luxury industry have grown in the last few days after some European fashion houses reported sales figures that suggest a slump in demand might be easing.

Last week, LVMH Moet Hennessy Louis Vuitton, the world’s largest luxury group, reported a return to sales growth in the third quarter. Gucci owner Kering also positively surprised investors on Wednesday after recording a smaller-than-expected sales decline in the third quarter, with demand for the company’s luxury goods improving in North America. 

Italian fashion company Brunello Cucinelli also recently reiterated its full-year growth target and said it was seeing very positive sales across all geographic areas. 

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During the third quarter, net sales at the Prada brand declined 0.8 per cent at constant exchange rates, less than a 1.7 per cent drop expected by analysts. Sales at Miu Miu brand rose by 29 per cent increase, “driven by widespread appreciation across categories and geographies,” according to the company. 

The Miu Miu brand, popular among Generation Z consumers, is facing tough comparisons to the same period last year when sales jumped by 105 per cent. 

Prada Andrea Guerra, group chief executive officer at Prada, said the fact that Miu Miu has “maintained a sustained growth trajectory for 4 years, including in this quarter that was facing triple-digit comps,” showed the “health” of the brand and the wider group. 

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Miu Miu growth helps Prada to defy luxury downturn

Still, some analysts are cautious when it comes to calling a recovery for the sector overall. In a note last week, Berenberg analysts wrote that “luxury is at an inflexion point,” mentioning pressure in China, a squeeze on incomes among aspirational consumers and shifting habits among younger shoppers as factors that have reshaped the landscape since the “exceptional” 2010s. BLOOMBERG