With Kering and LVMH reporting underwhelming financial results, it follows that their fellow luxury groups would be hit hard by the coronavirus pandemic. Indeed, Prada Group has suffered an imposing loss due to store closures, dwindling travel and reduced wholesale, posting a 40 percent net revenue decline, down to €938 million EUR (approximately $1.1 billion USD).
Like its peers, Prada Group — which owns Prada, Miu Miu and Church’s footwear — touts resilience during these tough times, emphasizing diminished retail and buoyant e-commerce, which saw a 32 percent decline and “triple-digit sales growth during and after the lockdowns,” respectively. The Group’s statement also highlighted its “disciplined approach” to cost containment and effective supply chain management as key factors for minimizing loss, realized through lease renegotiation and a tightened marketing budget.
Prada closed 70 percent of its stores in response to the epidemic, slicing wholesale by a whopping 71 percent, a drastic move that the group is only just now beginning to recover from. Unsurprisingly, the “entire Asia Pacific region” has boosted Prada’s fortunes as the area’s lockdowns loosen, reportedly enjoying double-digit sales growth in the month of June, the final month of 2020’s first half. Europe and Japan are seeing some bounceback as well.
“I am very proud of the commitment and sense of responsibility demonstrated in these circumstances by all our people,” Patrizio Bertelli, Prada Group CEO, said in a statement. “The first half of 2020 saw a temporary interruption of our growth trajectory which, in a situation of progressive control of the pandemic, we are confident will gradually resume from the second half of 2020, when our store network will again be fully operational.”
Time will tell if Prada’s measures for financial recovery, like its steps to improve diversity, will pay dividends.