Prada Earnings Leap By 74%

By: EW News Desk Team   Date: 20 September 2011

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20 September 2011

 Italian fashion house, Prada, reported a 74% gain in first half profit, beating its own forecast in its June listing prospectus, driven by surging demand in Asia. 

The company, Prada Group, posted an "outstanding" net profit of €180 million in the six months to July, more than the €103 million for the same period a year ago.

Sales in Asia, rose by more than 35% to €368 million, with the Greater China region contribution most to the surge. Prada, who conducted an initial public offering in Hong Kong in June this year, plans to open 80 new stores this year, with 25 in the Asia Pacific region.

Deputy Chairman Carlo Mazzi said he is "quite confident Prada will deliver good results in the future," and dismissed any concerns that the company may be affected by the economic crisis in Europe and the U.S. 

"We are continuing exactly what we planned in terms of investments, particularly the new opening of stores," said Carlo Mazzi, deputy chairman for Prada. "We are in the luxury goods markets and not in the mid-market. Usually this segment of the market is less hit by the crisis," Mazzi said.

The group's net debt also showed a significant decrease, reported the Financial Times. As of July 31st 2011, net debt was €135.2 million, down from €408 million six months earlier as a result of its having €200 million from a capital increase undertaken at the time of its listing. 

Chief Executive, Patrizio Bertelli, said he was "particularly satisfied" with the first half figures, which was an affirmation of the group's expansion strategy as presented to its investors prior to its floatation.

The group has already opened 29 new stores in the past 6 months, bringing its total network of directly owned stores to 358. It plans to open 550 more new stores by the end of 2013, with more than half of the numbers in Asia Pacific, Latin America, Russia and the Gulf nations.

However, the company's shares traded weaker amid general concern and pessimism about European economies. 

Prada's Hong Kong listed shares were down 3% on Tuesday early trade. 


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