Italian luxury group Prada has reported a sharp fall in both sales and profits in the quarter ending October 31st, missing analyst’s predictions.
Net sales tumbled 5.6% from €839m in the same period last year to €792m, as pro-democracy protests in Asia impacted on sales across the luxury and leather-goods market.
The fashion house’s decline in third-quarter profits was imminent given the decreased demand for luxury goods in Asia, in particular Hong Kong and Macau, its biggest regional market accounting for 38% of sales.
In a statement that was posted on Friday last week, Patrizio Bertelli, Chief Executive Officer of Prada Spa, said:
“2014 is proving to be a more challenging year than expected. On top of the ongoing difficult international economic environment, the luxury good market is undergoing a certain readjustment, the extend and nature of which is not yet entirely clear. We are confident that the market has a positive medium-term growth outlook, but also aware of the increased level of competition.’
He continued by stating:
“Consequently, we remain convinced that we have made the right choice in continuing to prioritize the Group’s medium-term deleopment, through investments focused on achieving qualitative and stylistic excellence. We are also working on making our business structures more efficient and improving the operating performance of our stores, in order to ensure the Group achieves satisfactory levels of profitability.”
The group, which also owns Mui Mui, Church’s and Car Shoe, has said that it will continue to cut costs, opening fewer stores than originally planned next year.