While the Asia-Pacific area showed signs of recovery and the new ready-to-wear and leather goods collections posted positive results, Prada SpA logged another six months of decline in profits and revenues.
In the first half of the fiscal year ending July 31, net profit was down 18.2 percent to 116 million euros, or $140 million at current exchange, from 141.9 million euros in the same period last year.
Revenues decreased 5.5 percent to 1.46 billion euros, or $1.76 billion, compared with 1.55 billion euros last year.
“The complex task of restructuring our operating processes, which is aimed at providing the group with the tools needed to access an increasingly competitive market, is progressing well; however, more remains to be done,” said chief executive officer Patrizio Bertelli. “Having one of the best-known and most respected international brands, with undisputed leadership in design and innovation, means we have to make choices in the pursuit of growth that privilege the preservation of the cultural and stylistic fundamentals that our brand identity is based on.”
The group is going through a phase of restructuring, and Bertelli pointed to its digital transformation, which “continues apace, enhanced by the launch of e-commerce in all markets, including China. Meanwhile, our dedicated team has expanded significantly to complete the digital presence of group brands and to pursue the important aim of offering a seamless online and offline shopping experience.”
Bertelli was positive about long-term growth. “The extensive overhaul of Prada Group’s cost structure creates operating leverage that will allow group profits to benefit rapidly from revenue growth. In the meantime, we will continue to protect cash generation by keeping net working capital and investments under control. We are confident that our action plan is the best way to return to steady growth in revenues and margins, albeit aware that benefits may take longer than expected. Our cash flow and balance sheet remain solid, allowing us to focus on value creation for shareholders over a broad time horizon.