Prada, the renowned Italian fashion group, has experienced a significant rebound in sales in Asia since June after grappling with a 40% decline in comparable revenues in the first half of the year due to the adverse effects of the coronavirus pandemic. In the six-month period ending in June, Prada’s revenue plummeted to €938 million at constant exchange rates, surpassing analysts’ forecasted 35% decrease. Furthermore, the company registered a net loss of €180 million primarily due to store closures and the absence of tourism caused by the Covid-19 crisis.

Nevertheless, Prada has recently received positive news as it has witnessed double-digit sales growth in Asia, with encouraging signs emerging in other markets as movement restrictions have been eased. The e-commerce sector of the company reported an impressive sales growth of 100% or more during and after the lockdowns. Patrizio Bertelli, the Chief Executive, expressed confidence that sales would rebound during the second half of the year.

To navigate through the crisis, Prada implemented various cost-cutting measures, such as renegotiating rents and canceling or postponing marketing initiatives. Additionally, the company made the decision not to pay a dividend for 2019. Prada’s swift reopening of its production sites in Italy and its direct control over the supply chain enabled it to supply stores with new seasonal clothing in a timely manner and effectively manage its inventory without excessive stock.

The sales recovery of Prada was interrupted by the global health emergency, initially affecting the Chinese market and later spreading to Europe and the United States. The company had been in the midst of a sales recovery for two years, attributed to a revamp plan aimed at boosting e-commerce and maintaining full-price sales. As part of this plan, Prada appointed Raf Simons as co-creative director alongside Miuccia Prada earlier this year, a move that industry observers believe may facilitate a potential succession.

Despite the challenges posed by the pandemic, Prada remains optimistic about its future prospects and is implementing strategies to navigate the difficult business environment. Through cost-cutting measures, sustained e-commerce growth, and efficient inventory management, the company aims to achieve growth in the second half of the year and continue its path towards success in the luxury fashion industry.

Useful Links:
1. Prada Official Website
2. How COVID-19 Scrambled Luxury’s Distribution Model – Vogue Business