Prada to open 80 more stores worldwide in next 12 months

While it expects growth in the mainland luxury market to slow down, Italian fashion giant Prada plans to press ahead with its strategy of opening more stores around the world, even though analysts warn that could hurt profitability.

Carlo Mazzi, deputy chairman of the Hong Kong-listed company, said it would add about 80 stores globally this fiscal year, spending €350 million (HK$3.7 billion) to drive future growth.

The mainland would remain a prime destination, with 10 to 15 new stores, largely Prada and Miu Miu, taking the total to around 60, according to Mazzi.

However, analysts have raised concerns about the impact of the central government's campaign against extravagant spending by officials on the mainland's luxury goods sector.

"Chinese people are travelling more and more and increasing very much their [purchases] abroad, [while at the same time spending] a little less on luxury goods in China," Mazzi said on the sidelines of the Asia Financial Forum in Hong Kong. "But their [purchases] are continuing to grow very fast overseas."

He said that was good for the company because "we are not selling food, which people buy where they live. We're selling luxury goods, which people buy on their holidays."

Prada, a leather goods and ready-to-wear brand the family of chairwoman Miuccia Prada set up in Milan in 1913, now operates 31 Prada stores and 15 Miu Miu stores in first-tier mainland cities or coastal regions.