MILAN: Italian fashion group Prada said on Tuesday that it would close 2020 with an operating profit after a strong recovery from a first half coronavirus-driven sales slump.
The Milanese luxury brand said it had decided to provide the unscheduled business update before disclosing full-year results in March in order to avoid uncertainty over its performance due to the COVID-19 pandemic.
The fallout from the COVID-19 crisis had triggered a 40% decline in Prada’s revenues in the first half of the year, leading to a 196 million euros operating loss ($241 million).
That compared with a 150 million euro operating profit in the six months through June 2019.
Prada said sales had improved in the second half of 2020 despite store closures corresponding on average to 9% of the network, “culminating for the retail sales in a full recovery to 2019 levels in the month of December”.
In the July-to-December period retail sales, which account for around 90% of Prada’s total, posted a 6% decline at constant exchange rates.
“This seems a good feat, and probably better than what most other groups will report, on the back of a strong consumer driven recovery for the Milanese brand”, Bernstein analyst Luca Solca said of Prada’s update.
Europe and Japan suffered due to the lack of tourist flows, Prada said, with a positive performance in the Americas, the Middle East, Russia and above all Asia, where China grew by 52%.
Wholesale sales declined as Prada pressed on with a strategy, which it began in 2019, to shrink its network so as to have uniform prices for its goods.
“I am very satisfied with how we have faced the serious difficulties of the year just ended,” Chief Executive Patrizio Bertelli said in a statement.
($1 = 0.8150 euros)
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