Prada says won’t give up on lagging secondary brands
Prada plans to focus its next retail push on the Middle East and the Americas to offset lower spending in Europe and lessen its reliance on Asia, where rapid growth is levelling off.
Italy’s Prada sees growth potential in its smaller brands, which continued to lag the performance of its eponymous fashion label in the first quarter, the company said.
Net sales for its flagship Prada brand grew 18 per cent from the same quarter of last year to 638.8 million euros (HK$6.6 billion), mainly supported by retail income in Greater China and the Americas.
Such growth has been elusive for the other names owned by the group - Miu Miu and the far smaller Car Shoe and Church’s brands.
Net sales at Miu Miu, named after chairwoman Miuccia Prada, grew 5 per cent in the three months to the end of April, underperforming the brand’s potential, Prada chief financial officer Donatello Galli said on a conference call.
“We don’t think this year, due to the market conditions, will be a turning point for Miu Miu. We have to be a little bit more patient,” Galli said.
Analysts say Miu Miu’s growth is hampered by the fact it is better known in recession-hit Europe, rather than America and Asia Pacific where the whole group posted growth over 20 per cent for the first quarter.
“The core brand is going incredibly well and they have to develop Miu Miu,” said Mario Ortelli, analyst at Bernstein Securities.
Prada has said it plans to focus its next retail push on the Middle East and the Americas to offset lower spending in Europe and lessen its reliance on Asia, where rapid growth is levelling off.
Galli said Prada would keep Church’s and Car Shoe - which respectively accounted for 2 per cent and 1 per cent of first-quarter sales - as “options” for future growth.
“They are an expansion opportunity for the future,” Galli said. “At the moment, they will stay there.”