The Prada Group is going strong in the first nine months of 2023, but has two concerns. The first is leather goods, which grew by only 1% in the June-September period, while footwear did +10%. For CEO Andrea Guerra, “the market is taking a breather” after years of sustained growth. The second headache is the brand Church’s, which continues its downward trend: in the first nine months of the year, the shoe brand’s revenues fell by 19%. They were worth just 19 million euros out of 2.98 billion euros.
The first of two concerns
Leather goods account for 47% of total sales. It grew by 8% in the first nine months of 2023 to 1.4 billion euros. But in the third quarter the increase was only 1%. Commenting on the financials, Andrea Guerra told WWD that the leather goods market saw “an incredible increase in size” in the 2020-2022 period, while now “it’s sort of taking a breather”. In the nine months, footwear revenues increased by 16% (+10% in Q3) thanks to both trainers and formal shoes.
Price increase in 2024
Overall, in the first nine months of 2023, the Prada Group’s revenues increased by 12% compared to the same period last year, to 3.34 billion euros. At constant exchange rates, the growth is 17%. The company points out that it has achieved “11 quarters of uninterrupted sales growth at full price and on a comparable basis”. Guerra and CFO Andrea Bonini pointed out that the group continues “to grow above the industry average”. And they pointed out that the group’s investment strategy will not change in 2024. The year in which prices will probably grow at the same rate as in 2023: from 4% to 6%. This was stated by Guerra himself.
Opposite fates of the brands
Miu Miu is growing strongly: retail revenues increased by 49% to 446 million euros. For the nine months and at constant exchange rates, retail sales of the brand Prada rose 13% to 2.5 billion euros, or 84% of the total. In the conference call with analysts, Guerra pointed out that “it is Miu Miu that is catching up, and not Prada that is slowing down”. No mention, instead, was made of the performance of the brand Church’s. That in the nine months recorded a 19% drop.
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