Prada Takes a Sales Hit Amid COVID-19 – But It’s Expecting to Rebound in the Second Half

MILAN – Cost containment measures, double-digit growth in June in the entire Asia Pacific region, and triple-digit online sales growth during and after the global lockdowns eased the pain at Prada SpA, but could not offset the closure of the luxury group’s stores from February to May, impacting its bottom line in the first half of the year.

In the six months ended June 30, Prada reported a loss of 180 million euros. This compares with profits of 155 million euros in the same period last year, which benefitted from the Patent Box tax relief relating to the years 2015-19.

Revenues in the first half amounted to 938 million, down 37.6 percent compared with 1.57 billion euros last year.

“I am very proud of the commitment and sense of responsibility demonstrated in these circumstances by all our people,” said Patrizio Bertelli, chief executive officer of the group. “The first half of 2020 saw a temporary interruption of our growth trajectory which, in a situation of progressive control of the
pandemic, we are confident will gradually resume from the second half of 2020, when our store network will again be fully operational. The excellent response of local consumers after the re-openings, confirms the desirability of our products and the strong relationship with our customers, which has been further strengthened by our continued focus on digital technology. The recent positive trends in all markets, combined with our solid balance sheet and financial position, allow us to look to the future with confidence today.”

The group touted a “strong revenue momentum registered up until the end of January 2020,” up until  the health crisis hit. Following the reopening of the store network, Prada “has seen ongoing recovering sales trends, with significant growth in Asia as well as encouraging signs in other markets, driven by local consumption and despite the lack of tourism,” stated the company on Wednesday.

Prada also stood by its decision to reduce its exposure to the wholesale channel starting last year, and to end markdowns.

This story was reported by WWD and originally appeared on WWD.com.

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