Italian fashion group Prada has reported a significant recovery in sales during the first half of 2021 and is anticipating further growth in the second half of the year. The luxury brand, based in Milan and listed in Hong Kong, saw its total revenues at constant exchange rates increase by 66% to €1.5 billion ($1.78 billion). While this falls slightly below pre-pandemic levels from the first half of 2019, it exceeded the expected sales of €1.43 billion.

Prada, like many other luxury brands, faced challenges during the global health crisis, experiencing disruptions in sales. However, the company witnessed a rebound in sales last summer following the easing of restrictions in the Chinese market. The industry as a whole is now recovering rapidly, with several key players surpassing their revenue levels from 2019. Prada’s store network generated revenues of €1.281 billion, marking an 8% increase compared to the first half of 2019, even with a sixth of its stores remaining closed. The company also experienced a “strong acceleration” in sales during the second quarter.

While Asia and the Americas have exceeded pre-pandemic levels, European revenues still lag behind by 29% due to extended store closures in the region. However, Prada noted that sales partially recovered once stores reopened, as strong demand from local customers offset the absence of tourists. E-commerce sales also saw significant growth, increasing by 100% or more compared to the previous year, and now accounting for 7% of retail revenues.

Prada attributes its success to its strategy of focusing on full-price sales and tight cost controls, which resulted in a positive earnings before interest and taxes (EBIT) of €166 million. This marks a considerable improvement from the previous year’s loss of €196 million caused by the pandemic. The EBIT also surpassed analysts’ expectations of €143 million and exceeded the €150 million operating profit in the first half of 2019.

Overall, Prada’s strong recovery in the first half of 2021 and its optimistic outlook for the second half demonstrate the resilience of the luxury fashion industry as it rebound from the effects of the COVID-19 crisis. The company’s emphasis on e-commerce, full-price sales, and cost control has positioned it for continued growth and success in the post-pandemic world.

Useful links:
Wall Street Journal – Prada Reports Strong Rebound in Sales
Business of Fashion – Prada Posts Record Sales Rebound as China Demand Recovers