Prada's profit falls 93 per cent despite strong recovery

The Italian fashion house Prada saw nearly all its profits go up in smoke due to Covid. However, they show no sign of despair, as the recovery already took off in the second half of the year.

18 per cent of stores remained closed

Last year, the luxury group’s revenue fell by almost a quarter to 2.42 billion euros. The damage was particularly severe in the first half of the year (-32 per cent), but during the second half, a recovery trend was noticeable, and the revenue loss did not exceed 6 per cent. This trend even led to growth in December, compared with the same period a year earlier, despite new lockdowns in various countries. For the year as a whole, an average of 18 per cent of stores remained closed due to the pandemic.

Operating profit fell by 93 per cent to 20 million euros. In the first six months of the year, operating losses rose to 196 million euros, however in the second half of the year, the company yielded a positive operating result of 216 million euros, writes Retail Gazette.
 

Adjusted strategy

According to Prada, the pandemic accelerated its digital transformation and omnichannel strategy. For instance, sales from the e-commerce channel tripled compared to 2019 and “brand relevance in the digital world increased.”

Prada further reviewed its investment programme during the year, prioritising vital strategic projects. Some marketing initiatives were cancelled or postponed without compromising brand visibility. The reopening of stores in various countries went hand in hand with the roll-out of pop-up stores, supported by a dedicated communication strategy.