Prada results underscore weaker luxury demand

Miu Miu is having a moment. The brand claimed the number one spot on Lyst’s Q2 Hottest Brands Index, with Prada landing just a few places behind in fourth. But while the buzz is real, fuelled by clever styling, viral looks, and a steady stream of celebrity endorsements, it only tells part of the story. Scratch beneath the surface, and Prada Group’s latest financials paint a more complex picture: being the brand of the moment doesn’t automatically translate into long-term resilience.

Prada’s H1 2025 earnings landed this week with mixed signals. Group revenues were up 9 percent, not bad, but below what analysts had hoped for. More notably, sales for the Prada brand itself slipped 2 percent. For a house that helped define modern luxury, it’s a sign that even the biggest names are feeling the pressure of a more cautious, value-conscious consumer.

“The results reflect the broader squeeze on global luxury,” says Robyn Duffy, Senior Consumer Markets Analyst at RSM UK. “Buyers are more price-sensitive, especially in Asia and Europe, and reduced tourist spending is making it even harder to drive growth.”

Just a few years ago, brands could count on booming demand from Chinese shoppers in European capitals and a wave of post-pandemic revenge spending. But the mood has shifted. Inflation, global uncertainty, and ongoing trade tensions are now shaping a very different kind of market, one that Prada itself has called “somewhat unprecedented.”

Still, there’s no denying Miu Miu’s glow-up. While its older sibling treads water, Miu Miu is riding high with a 49 percent jump in retail sales. Its Y2K-cool energy and youth-first attitude continue to strike a chord with Gen Z and millennial shoppers hungry for fashion that feels fresh, playful, and just a little subversive.

There are still a few bright spots. Sales in the Middle East and the Americas outperformed expectations, proof that geographic diversity is still one of the best ways to offset softness in Asia and Europe.

The recent exit of the Prada brand CEO, coupled with the high-stakes acquisition of Versace, suggests the group is in the middle of a major rethink. Bringing Versace into the fold is a bold play, it adds punch and star power to the portfolio, but it also raises a familiar question: how do you keep a brand mix fresh and distinctive without losing focus?

All eyes will be on the second half of 2025. This isn’t just crunch time for Prada, it’s a pivotal moment for the luxury industry overall. Social buzz might keep a brand hot for a season, but in this climate, long-term relevance will come down to agility, clarity, and the ability to move fast without losing your core identity.