Runway Relevance Drives Impressive First-Half Revenue Growth for Miu Miu and Prada
Miu Miu experienced a remarkable first half with a staggering 50 percent year-on-year revenue increase, attributing its success to renewed runway appeal that resonated with consumers. Meanwhile, Prada’s flagship brand also witnessed substantial growth, with sales soaring by 18 percent, contributing to the overall success of the Milanese fashion group.
During a recent call with analysts, Prada’s revamped management team highlighted Miu Miu’s cultural relevance and clear positioning as a significant growth driver. Additionally, the brand’s exposure to Asian markets, which rebounded from pandemic-related shutdowns last year, played a crucial role in its impressive performance.
The Prada Group’s first-half revenues reached €2.2 billion, a remarkable 20 percent year-on-year growth, although slightly missing analyst estimates. The Asian market witnessed a sharp rise in sales, while the European market demonstrated resilience and stability, according to Andrea Guerra, the Chief Executive Officer.
In October 2021, Miu Miu introduced a more accessible and social media-friendly brand platform featuring rebellious twists on classic collegiate attire. This strategic move ignited interest in the label. Miu Miu continued to build on this momentum by introducing creatively ironic yet sophisticated officewear, ballet flats, luxe tights, and retro pedal pushers. Furthermore, a revamped handbag program with a touch of timeless elegance contributed to sustaining interest without appearing overly trendy.
Retail sales were the driving force behind the growth, with an impressive 18 percent increase to 1.97 billion euros, primarily fueled by like-for-like full-price sales. Wholesale revenues also contributed positively, rising by 8 percent to 194 million euros.
Despite the success, the US market showed signs of slowing demand, with retail sales experiencing a 1 percent decline in the first half. Nevertheless, the overall business with American clients still demonstrated growth, showing a low-single-digit increase when accounting for sales to US tourists in Europe. Retail sales in the Americas amounted to 361 million euros, slightly surpassing the previous year’s 360 million euros during the same period.
Japan emerged as the top-performing region during the semester, with a remarkable 38 percent increase in sales, reaching 224 million euros. This growth was fueled by recent investments in the retail network, a strengthened organization, solid domestic demand, and increasing tourism flows.
The Middle East region also showed promising growth, with sales rising by 15 percent to 92 million euros.
The first half saw a substantial rise in operating profit, increasing by 61 percent to 491 million euros, compared to 305 million euros last year, resulting in a margin of 22 percent on sales. Leather goods sales rose by 12 percent, ready-to-wear by 36 percent, and footwear by 20 percent, indicating the broad-based success of the Prada Group.
Gross profit demonstrated a similar upward trend, gaining 21 percent to reach 1.79 billion euros, compared to 1.47 billion euros during the same period last year. This strong performance sets Prada Group apart, especially amidst recent reports of declining sales in other luxury brands, such as Cartier-owner Richemont and sector leader LVMH, who cited lower demand from aspirational customers in the US.
Prada Group’s robust results, aligning closely with LVMH’s 20 percent fashion second-quarter growth, reaffirm its ability to navigate the increasingly uncertain fashion market without relying on the support of a major conglomerate.
To further bolster governance and ensure a seamless transition to the next generation of leaders, Prada Group recently revamped its executive ranks. While Miuccia Prada remains co-creative director alongside Raf Simons, she stepped down from her co-CEO title upon the appointment of former Luxottica chief, Guerra earlier this year. Similarly, her husband Patrizio Bertelli also relinquished his CEO title and transitioned to an executive chairman role. Furthermore, the group appointed Gianfranco D’Attis, formerly of Dior, as Prada’s new brand-level chief executive.