Milan-based luxury group Prada SpA reported sales were only up one percent, which indicates an unfortunate decrease from previous years. According to Bloomberg News, this downfall marks the slowest half-yearly sales increase in three years, which is partially accredited to a slower demand from Asia and Europe.
MarketWatch reported that sales for the first half of the year totaled to $2.34 billion, but the company argues these figures are due to decreased sales in Korea, Hong Kong, Singapore and Europe. Even with sales at an eight percent increase in America, the weak economic stability of the other nations left Prada in the dark.
“In the first six months of the 2014, the Group has operated in a more difficult political and macroeconomic environment than expected with unfavorable exchange rates and a general fall in consumption,” said Chief Executive Officer Patrizio Bertelli in a press release.
Nonetheless, the raise of concern is justified, as handbags and other leather goods are usually in year-round demand. However, 4-Traders reported that Prada, Louis Vuitton and Gucci all earn more profit from bags than other retail, yet Louis Vuitton and Gucci have plummeting sales. Prada is holding its breath that it will not follow in the footsteps of these likewise brands.
“In the coming months, our priority commitment shall be towards monitoring market trends and performance without, however, interrupting the implementation of our plans for growth. At the same time, we will implement a rigorous cost control program with the aim of protecting margins,” Bertelli said.
Hong Kong retail sales fell nearly seven percent year-on-year during June, which plays a large part in Prada’s revenue loss. Prada’s plans for growth will need to overcome these tall hurdles, but Bertelli and the company seem confident that their new plans of action will bring in high profits.
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