Milan (Italy) (AFP) – Prada said Thursday that its net profit slumped in the first half of this year as it integrates its new brand Versace, amid what the luxury fashion company called a “disrupted” macroeconomic environment. Yet the 15 percent drop in net profit, to 327 million euros ($377 million) beat the analyst consensus forecast established by FactSet. The owner of the Prada, Miu Miu, and Versace saw revenue rise by 11 percent to 3.0 billion euros.
The Milan-based fashion house called its results “solid” amid a general slump in the luxury sector that predates the war in the Middle East. But it warned that growth opportunities were waning in the tough environment for luxury. “There is no obvious growth trend across the world,” chief executive Andrea Guerra told analysts in a conference call. “There are in some countries, but not all across the world,” he cautioned, adding that there nevertheless remained “huge opportunities” for the company. “While the environment remains disrupted, we are confident in the strength of our brands and their long-term potential,” Guerra said in a statement.
At Prada, the company’s flagship brand, retail sales rose by 3.3 percent in the first quarter and 6.3 percent in the second quarter, helped by improvements in the Americas, Japan, and the Asia-Pacific region and growth in all categories. But the war in the Middle East was having an effect, reducing second-quarter growth by one percentage point, Guerra said. Revenue at Miu Miu, Prada’s more youthful line that has been a sales driver in recent years, rose by 2.5 percent in the half year — against the difficult comparison of a 49 percent rise in the first half of 2025. There, the effect from tensions in the Middle East was even more dramatic, curbing growth by about three percentage points, said Guerra. “We have to adapt mentally to a new way of doing in a new world of normalized growth,” he said of Miu Miu.
Versace, which Prada acquired last year, performance was “in line with expectations”, the company said, adding that focus for the brand was on improving quality and retail execution. Guerra cited a “huge milestone” for the Prada brand coming in mid-September — a new flagship store in Milan. The company, he said, will open a “cultural, artistic, fashion, art, retail food experience” in Milan’s Galleria Vittorio Emanuele II, the ornate 19th-century shopping arcade where the first Prada boutique opened in 1913. It will bring together sales spaces with lounge areas and offices, in what Guerra called “the epicentre of epicentres.”
© 2024 AFP
