Prada Overcomes Pandemic Restrictions With 60 Pct Growth

Despite closure of about 17 percent of its worldwide stores in the first half of 2021 because of continued COVID-19 restrictions, Prada reported revenues of more than $1.52 billion for the six months ending June 30, up 60 percent from the same time last year and 8 percent from pre-pandemic 2019.

That focus on retail sales did lead to a massive drop in wholesale sales, which dropped 37 percent from the first half of 2019 to about $233 million this year as part of what company leaders call a “selective” approach to increase brand momentum and profitability.

“The commitment to our brands and stronger ties with our customers have delivered robust growth in sales across markets and product categories,” said Patrizio Bertelli, CEO of the Prada Group, in the company announcement Thursday (July 29). “We improved gross margin as well as the Group’s profitability, despite the uncertain environment.

Bertelli added that he expects the sales momentum to stay strong in the second half of the year, as the company’s brands “have plenty of potential and we will unlock it over the medium term.”

Prada’s profitability in the first half of 2021 was driven by full price sales and better management of the company’s operating costs. The company’s spring/summer and fall/winter fashion shows remained popular for online consumers, with increased brand visibility and better engagement as a result.

Sales in Europe, down 29 percent from 2019, were hurt by an average of 36 percent of stores remaining closed and a lack of tourists early in the year, while in the Asia Pacific region, sales were up 65 percent compared to 2020 and 35 percent versus 2019. This was highlighted by mainland China, which was up 77 percent compared to 2019, Taiwan, up 74 percent, and Korea, up 108 percent since 2019.

Japan’s results, up 25 percent from 2020 but down 24 percent from 2019, suffered due to restrictions imposed by the government ahead of the Olympic Games. And in the Middle East, sales were up 129 percent from last year and 28 percent compared on the backs of increased tourists and an uptick in local sales.

Prada is also part of the world’s first global luxury blockchain with Cartier and LVHM. Aura Blockchain Consortium “represents a single, innovative solution to shared challenges of communicating information on authenticity, responsible sourcing and sustainability in a secure, digital format,” the release stated.

The goal is to give consumers a high quality of transparency and traceability through the entire lifecycle of a product. Online sales showed triple-digit growth for Prada in the first half of 2021 and now accounts for 7 percent of Prada’s overall retail sales.