Fashion house Prada has seen profits drop.
Net income for the first 6 months of 2017 was also down by around 20%, to just over €115m.
They’re blaming a strong Euro, and dire US and European sales.
Like an oil tanker
Prada is finding it hard to turn itself around.
It has been suffering from increased competition online, a retail network in dire need of a facelift, and an outdated product range.
Investment in its digital sales channels and renovating 76 outlets are part of its recovery strategy. However, it could take a leaf out of Gucci’s handbook: sales have almost doubled for the Kering owned brand on the back of hiring a new creative director.
Some good news though: sales were up in key market China. It was the demand downturn here 5 years ago which triggered Prada’s financial troubles. However, Japan and the Middle East both saw sharp retail declines.
Analysts think sales in the fashion industry should grow by around 4% per year, up to 2020.
However, whilst shares in rival fashion conglomerate LVMH have doubled in value in the past few years, Prada’s stock has halved. Clearly, the firm has yet to benefit from the luxury sector’s recovery.
Prada shares were down 15%.