Luxury brand Prada's profit has dropped nearly 50 % in its third quarter. It had expected a small setback, but that was much worse than anticipated. Asian demand was particularly weak.
Prada's net profit was 132.6 million euro last year, but 2014's third quarter only resulted in a 74.5 million euro net profit, which is a 44 % drop. Turnover also dropped 5.6 % to 800.7 million euro.
Particularly the sales in October were very low, because of abysmal Hong Kong and Macau sales. In total, Asian sales dropped 9 %, while Europe also fell back 4 %. North and South American sales grew 2 %.
Prada says that the luxury market is changing and that the company is now trying to reinvigorate its sales, but that has led to even lower profit numbers for the time being. One strategy is to introduce a new collection of handbags, which has traditionally been an important source of income for Prada. Nevertheless, handbag sales also suffered in the third quarter, with a 9 % sales drop.