Wednesday, 18 March 2020

Coronavirus halts growth at Italy's Prada

Coronavirus has halted two years of sales growth at Italian fashion group Prada, which accelerated in the second half of 2019, the company said on Wednesday.

The epidemic, which is severely hitting sales across the whole luxury industry, “interrupted the growth trajectory” and will have a negative impact on this year’s results, the company said.

“Prada is implementing a comprehensive contingency plan to mitigate such effects, relying on its flexible supply chain and lean organization,” it said in a statement.
The luxury group said it was confident it could overcome the crisis and “be ready to capture the recovery”.

Full-year sales rose by 2.7% to 3.226 billion euros ($3.52 billion) at current exchange rates compared with a 2% increase in the first half of 2019, but they were flat at constant rates.

This marked the second year in a row of sales growth after a three-year decrease, helped by a relaunch strategy focused on renovating shops, new products and digital sales.

Earnings before interest and taxes (EBIT) declined 5.3% to 306.8 million euros last year, hit by ongoing measures to reduce markdowns and scale down the wholesale distribution network.

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