Prada’s Profits Drop by $219 Million, Sales in China Up by 60%

Must Read

How To Block Your Bank Account And SIM Card In Case Of Emergency

Losing your phone and wallet or having them stolen can be very frustrating. However, in case that happens to...

List of First Bank of Nigeria Sort Codes in Nigeria

The sort code is a number that usually identifies both the bank and the branch where an account is held. The sort...

List of United Bank for Africa (UBA) Sort Codes & Branches (with addresses) in Nigeria

The sort code is a number that usually identifies both the bank and the branch where an account is held. The sort...
- Advertisement -

The year 2020 has been a truly challenging year for all kinds of businesses, including the most popular luxury brands. Due to store closures, Prada Group, as well as luxury groups LVMH and Kering, gained underwhelming financial results and tremendous losses in the first two quarters of 2020.

According to the research data analyzed and gathered by Comprar Acciones, Prada Group swung to a $219 million loss in Q1 and Q2 2020. In comparison, it was able to attain profits of around $190 million in the same period last year.

Prada’s Profits Drop by $219 Million, Sales in China Up by 60%

Net Sales of Prada Group By Brand from 2016 to 2019

Prada’s Profits Drop by $219 Million, Sales in China Up by 60% Brandspurng
SOURCE: Prada

Prada Group, which owns and operates Prada, Church’s footwear and Miu Miu, continues to manifest resilience during tough times. Even though its total retail sales dropped by 32%, it was able to triple its online sales in 2020.

Prada Closed 70% of Its Stores, Slicing Wholesale Sales by 71%

- Advertisement -

In order to minimize the company’s losses, around 70% of Prada’s stores were closed. This led to a whopping 71% decrease in total wholesale sales in Q1 and Q2 2020.

When it comes to Prada’s retail sales, all regions were affected. Its sales in the United States fell by 42%. Sales also dropped by 44% in the Middle East, 41% in Europe, while both the Asia Pacific and Japan experienced a 39% decline.

Prada’s Revenue Decline in H1 2020

Prada’s Profits Drop by $219 Million, Sales in China Up by 60% Brandspurng1
Source: Fashion United

Similarly, LVMH and Kering experienced drastic declines in their retail and wholesale sales. In the first half of 2020, Kering’s revenue collapsed by 29.6%. Its share price also fell slightly, from 598 euros to around 560 euros at the end of Q2 2020. Gucci, the company’s star brand, also wasn’t able to escape from a sudden revenue drop. In Q3 2020, its sales were down by 12%. Surprisingly, Gucci’s sister brand Bottega Veneta grew by 17%.

Read Also:  #STAYHOME&STAYSAFE – Cold Stone and Pinkberry Treats Now Comes With Essential Items!
- Advertisement -

LVHM, the world’s biggest luxury group, also experienced a dramatic drop. From Q1 to Q3 2020, its total revenue stood at $36.9 billion, down by 21% year-over-year. Despite this, the group was still able to finalize its acquisition of Tiffany & Co. after around a year of wrangling.

Read Also:  WhatsApp to become gateway to online luxury shopping

Prada’s Sales in China Up by 60% 

According to a report from Prada, its sales in China have sharply recovered since the end of March 2020 when its stores have been reopened for the public.

The appetite of Prada’s Chinese customers has remained relatively strong in spite of the coronavirus pandemic. The luxury goods market is expected to face a 35% drop in 2020. However, many luxury groups estimate that the strong rebound that they enjoy since Q2 2020 thanks to their Chinese customers will greatly minimize the overall financial loss that they’ll have this year.

By the end of Q2 2020, Prada registered a 60% sales growth in China. In July 2020, its sales were up by 66%. Additionally, a massive 44% of the company’s total global sales came from the Asia Pacific region.

- Advertisement -

Based on a study by American consultancy company Bain & Company, 37% of the total sales in luxury goods worldwide in 2019 came from Chinese shoppers. The bulk of these Chinese customers were travelling abroad at the time of their purchase.

Lastly, a report from Statista indicates that the luxury goods market is estimated to rake in around $285 billion in 2020, down by $18 billion when compared to its 2019 total. Around $65 billion is expected to come from the United States, $38 billion from China and $27 billion in Japan.

- Advertisement -
Prada’s Profits Drop by $219 Million, Sales in China Up by 60% - Brand SpurPrada’s Profits Drop by $219 Million, Sales in China Up by 60% - Brand Spur

Subscribe to BrandSpur Ng

Subscribe for latest updates. Signup to best of brands and business news, informed analysis and opinions among others that can propel you, your business or brand to greater heights.

- Advertisement -

LEAVE A REPLY

Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Prada’s Profits Drop by $219 Million, Sales in China Up by 60% - Brand SpurPrada’s Profits Drop by $219 Million, Sales in China Up by 60% - Brand Spur

Latest News

GTBank Shareholders Endorse N3.00 Total Dividend for 2020, Applaud Agbaje’s Leadership

Shareholders of Guaranty Trust Bank (GTBank) Plc, at the weekend unanimously endorsed the payment of a total dividend of...
- Advertisement -
BrandsPur Weekly Cartoons
- Advertisement -Prada’s Profits Drop by $219 Million, Sales in China Up by 60% - Brand SpurPrada’s Profits Drop by $219 Million, Sales in China Up by 60% - Brand Spur