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Prada Group reports 9 percent revenue decline in FY16

By Prachi Singh

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Business

The Prada Group ended its 2016 fiscal year with consolidated revenues of 3,184 million euros (3,384 million dollars), down by 9 percent at constant exchange or 10 percent at current exchange rates.

"As noted in my comments on the first six-month results, this past year we implemented a profound phase of business process rationalization - still underway - and identified important strategies to secure the Group's future growth. I am confident that the new global vision will enable our brands to fully express their strong potential, and generate sustainable growth: high-quality products, high level of creativity in both communications and customer relationships,” said Prada Group CEO Patrizio Bertelli, in a statement.

Prada reports sales rise in the UK and Russia

Asia Pacific reported a 12 percent decrease at constant exchange rates. The company said, China resumed rapid growth in the third quarter and Hong Kong and Macau saw reduced level of sales contractions versus past years and Greater China reported higher sales in the last quarter of the year.

Prada added that the European market with a 5 percent decline at constant exchange rates was adversely affected for most of the year by the reduction of tourist flows, especially in Italy and France, although France showed signs of recovery in the fourth quarter. The company said, particularly positive was the performance of Russia, with double-digit growth, and the UK, which reversed the decline of the first six months to end the year with strong growth.

The American market, with a sales decrease of 12 percent at constant exchange rates, continued to be affected by falling tourist flows in the USA, as well as generally soft spending patterns since the first part of the year, whereas Mexico and Brazil had positive growth.

After five years of consecutive growth, in 2016 sales declined in Japan by 13 percent at constant exchange rates due to reduced flow of tourists from China due in part to the yen appreciation. The Middle East saw a decrease by 10 percent at constant exchange rates compared to the prior fiscal year.

Prada and Miu Miu witness positive momentum

The company said, both Prada and Miu Miu showed improving trends with the efforts of recent months to make the shopping experience more exclusive and to enrich the offer with highly creative and innovative products producing concrete results in the ready-to-wear segment, which saw improved results throughout the entire second half of the year, along with footwear and leather goods.

The Group's 620 Directly Operated Stores produced revenues of 2,635 million euros (2,801 million dollars) in 2016, a decline of 13 percent at constant exchange and 14 percent at current exchange rates. However, Prada said, positive progress in sales trend were seen in the second half of the year, particularly in December 2016 and January 2017.

Sales across the entire wholesale channel rose to 504 million euros (535 million dollars), up by 14 percent at constant exchange rates and 13 percent at current exchange rates. Licensed business grew by 3 percent; with both eyewear and fragrances experiencing positive trends, with royalties of 45 million euros (47 million dollars).

Picture:Prada

Prada