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Miu Miu has delivered a sparkling performance for Prada Group in the first half of the year to drive a 20 per cent surge in group sales at constant exchange rate. Chairman and executive director Patrizio Bertelli described the Miu Miu contribution to first-half group results as “remarkable”.
Full-price retail sales at Miu Miu jumped by 50 per cent in the six months to the end of June, the company said. Prada itself was up by a solid 18 per cent. Both brands benefitted from growth in Asia, where Miu Miu has stepped up its exposure, particularly in China. Creative projects such as Miu Miu Women’s Tales and Miu Miu Select, which foster relationships with Miu Miu customers, have also played a part.
Overall, revenues rose to €2.23 billion in the first half ending 30 June, Prada Group said on Thursday. The group also reported profits above expectations, with an improved EBIT (earnings before interest and taxes) margin of 22 per cent at €491 million.
“The semester ends with solid results for the Prada Group, thanks to the desirability of its brands and to disciplined execution,” said Bertelli in a statement. “Our globally balanced distribution allows us to capture growth despite ever-evolving industry demand dynamics. We are pleased with the quality of Prada’s continued growth and with the remarkable performance of Miu Miu.”
The plan looking forward is to “consolidate” the attractiveness of the group’s brands and further invest in them, according to Bertelli, who was speaking on a call with analysts on Thursday afternoon.
Continued heat around the group’s brands drove a 21 per cent year-on-year increase in full-price retail sales to €1.97 billion. On past earnings calls, group chief executive officer Andrea Guerra has voiced plans to double retail space productivity as the group works towards building a €4.5 billion business — a goal outlined at its last in-person capital markets day in November 2021. Prada Group’s stable of brands also includes Church’s and Car Shoe.
All product categories performed strongly, with double-digit growth across leather goods (up 12 per cent), ready-to-wear (36 per cent) and footwear (20 per cent). Japan continued to be the largest growth market, rising 49 per cent year-on-year, while sales across the rest of Asia-Pacific grew by 25 per cent, supported by dedicated activations including the ninth iteration of Prada Mode in Tokyo (the next of these is scheduled for South Korea in September to coincide with Seoul Fashion Week and Frieze Seoul) and Prada Extends in Bangkok.
Prada is enjoying “accelerating momentum” in China as its creative social media execution and price discipline resonates with consumers, according to consultancy Bernstein’s senior luxury analyst Luca Solca. Tourism and local consumption also drove a strong performance in Europe and the Middle East, where sales grew 24 per cent and 14 per cent respectively, according to Prada.
However, the group joins major luxury brands such as LVMH, Richemont, Burberry, PVH, Ralph Lauren and Armani Group in reporting a stagnant performance in the Americas (retail sales were down 1 per cent).
Guerra told analysts, “2023 is a strange year… It has been, and remains, challenging on a month-to-month comparison. Asia closing down, Asia reopening… 2022 was also the finishing of the long Covid period with a lot of ups and downs. The second half will be a little awkward from this point of view.”
The group, Guerra believes, is still at the beginning of a strategic journey that he describes as “a cultural revolution”. In the six months ahead, the priority is on “investing more in desirability and strengthening cultural roots for our brands,” he said. “We feel this is the right moment to do it. We have the ideas, dreams [and] projects and we will do it in the most appropriate manner. We are always vigilant [and] agile. We feel that the time has arrived to really commit more to our brands and to our stores in terms of investments, capex and communication.”
“I think we are very well equipped to do another great six months,” Guerra concluded. “We hope and we think that we will be above the industry average.”
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