Prada’s sales recovered from last year’s strict lockdowns as the Italian fashion brand joined luxury peers in reporting higher demand for high-priced goods.
First-half revenue soared 66 percent at constant exchange rates to €1.5 billion ($1.78 billion), the company said in a statement Thursday. Analysts had expected sales of €1.4 billion.
Co-Chief Executive Officer and designer Miuccia Prada has been sharing the creative leadership of her namesake brand with Belgian designer Raf Simons since April 2020. Due to the pandemic, their first collection unveiled in September was presented digitally rather than in-person.
This duo will help Prada gain further market share of the handbags and the ready-to-wear markets, analysts at Citigroup led by Thomas Chauvet wrote in a note to clients last month, predicting the company’s revenue growth will improve.
The company said that it’s seeing strong progress in retail revenue, which has been well above pre-pandemic levels. Prada has been trying to reduce its wholesale exposure in order to be more exclusive, just like peers at Kering’s Gucci and Burberry.
Prada’s offering includes models such as the Cleo, a shoulder leather handbag, as well as athleisure products made out of sustainable products. The brand has collaborated with Adidas for its Luna Rossa sneakers, which are designed for sailors.
Prada’s first-half operating profit recovered to €166 million, exceeding the pre-pandemic level in 2019 of €150 million.
“The sales momentum will stay strong in the second half of this year,” Co-Chief Executive Officer Patrizio Bertelli said in the statement, adding that the company will hold a capital markets day to investors later this year.
Geographically, sales in Europe and Japan are still below pre-pandemic levels but revenue in its biggest market, Asia-Pacific, jumped by 35 percent from the first half 2019.
Prada joins LVMH, Richemont and Kering in reporting soaring sales as shoppers splurged on luxury products with savings they accumulated during lockdowns when they were stuck at home. Hermès reports second-quarter earnings on Friday.
By Angelina Rascouet
BoF’s editor at large Tim Blanks offers his take on the duo’s debut as co-creative directors of Prada.