Prada Hit by Luxury Market Slowdown, but CEO Remains Hopeful

Prada reported net profits of 249 million euros in the 2017 fiscal year ended Dec. 31, down 4.3 percent compared with 260.2 million euros last year. Revenues decreased 3.6 percent to 3.05 billion euros, compared with 3.17 billion euros in the previous year. The financial data refers to 12-month pro-forma data from January to December both for 2017 and 2016 for transparency because year-end has been brought forward to Dec. 31 from Jan. 31.

Despite the declines, CEO Patrizio Bertelli said he is satisfied with the progress made in 2017. “In the second part of the year and in the first months of 2018, sales trends have been progressively improving, thus demonstrating the first significant results from our ongoing strategic initiatives across the group.”

He said Prada’s investment in the store portfolio, in boosting global brand visibility and in the enriched product offer “is enhanced by a fast-growing digital presence. We have successfully improved our leather goods offer with increased newness at all price points, supporting full-price sales. The Prada brand has returned to growth across our key geographies.”

He said the company is confident “that this new chapter, founded on our brands’ cultural heritage and iconic values, will be key to the group’s success in an increasingly complex market. The launch of our campaign, Black Nylon, is emblematic of our new path toward the future, whilst respecting our identity. We have seen a promising start to 2018. I am confident this is the beginning of a new phase of development.”

The new tower at Fondazione Prada was unveiled to stage the fall Prada show last week, but its official opening to the public will take place on April 20 during Milan’s international furniture and design trade show Salone del Mobile, running April 17 to 22. The tower marks the completion of the foundation’s Milan venue, designed by Rem Koolhaas, with Chris van Duijn and Federico Pompignoli, from architecture firm OMA, unveiled in May 2015.

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