Blaming Covid-19 goes out of fashion at Prada as luxury designer boasts of sales recovery
The Covid-19 pandemic dented Prada’s business in the first half of 2020 but sales gradually rose throughout the second half, thanks to a brisk rebound in Asia.
Retail sales for the group for the year to 31 December 2020 recovered to the point that Prada registered no drop in sales in October and December compared to the same period in 2019.
The impressive recovery allowed Prada to close the year with a positive operating profit, a significant improvement compared to its net financial position at the start of 2020.
Earnings before interest and taxes (EBIT) totalled €20 m for the full-year, after a €216 m pre-tax profit in the second half, broadly in line with the same period of 2019, which compensated for a €196 m operating loss in the first six months.
Prada’s recovey in retail sales, which still fell around 18 percent for the full year to €2.1 bn comapred to €2.6 bn last year, were also led by Prada’s stores in Asia.
Retail sales fell everywhere apart from in Asia Pacific, where sales were up one per cent.
Retail business increased by 52 per cent in China and 61 per cent in Taiwan compared to 2019.
Prada also saw an increase in its e-commerce business, where sales which more than tripled compared to the 2019.
In Europe and Japan prolonged lockdowns stemmed the flow of toursists which Prada and other luxury clothes retailers heavily on. Sales fell by 35 per cent in Europe and 28 per cent in Japan compared to 2019.
Patrizio Bertelli, chief executive of Prada Group, said: “We successfully reached a good level of profitability and generated significant cash flow, improving our financial position. These results give us confidence to face the upcoming rebound, as soon as the most critical phase of the pandemic will end.”