Prada’s Profits Dive In First Half

New York Fashion Week 2015 shoes
Prada patent leather platform loafers.
Courtesy of Bergdorf Goodman.

Ongoing challenges in the Asia-Pacific market may be partly to blame for Prada Group’s declining profits in the first half and second quarter, ending July 31, 2015.

The Milan-based luxury-goods company, whose shares are traded on the Hong Kong stock exchange, noted in a statement that declines in the Asian markets were balanced by growth in Europe, America, the Middle East and Japan.

Profits fell 23 percent year-over-year, to 188.6 million euros, or $207.5 million, in the first half, while revenues climbed a modest 4.2 percent at current exchange rates, to 1.8 billion euros, or $2.02 billion.

In the second quarter, net income decreased 7 percent year-over-year, to 130 million euros, or $143 million. Q2 revenues rose 2.3 percent, to 996 million euros, or $1.1 billion.

“The luxury-goods market is undergoing a period of significant change  which must be met with a far-reaching, long-term strategy,” said Prada CEO Patrizio Bertelli, in the statement. “Our commitment remains centered on creative dynamics and the spirit of innovation so that we can constantly increase the levels of excellence of our products. In operational terms, we will continue with our thorough review of business processes in order to make them more efficient.”

In August, when Prada released its preliminary sales figures for the first half, Bertelli had said that slipping sales reflect “an economic and exchange-rate landscape that remains rather volatile, with the continuing weakness of important markets like Hong Kong and Macau, and the uncertainty that is looming over other Asian markets.”

Prada remained the top-performing brand in the group’s portfolio, which also includes Miu Miu, Church’s and Car Shoe — for Q2 and in the second half.

(Currency conversions calculated using period average.)