Prada Profit Rises 63% on Cost Cuts, Miu Miu Sales27 Apr 2007 • by Natalie Aster
Prada SpA, the Italian maker of Car Shoe and Azzedine Alaia fashions, said full-year profit increased 63 percent as costs dropped and shoppers purchased more Miu Miu apparel, reported the Bloomberg.
Net income climbed to 76 million euros ($103 million) in the year through January from 47 million euros in the prior period, the Milan-based company said today in an e-mailed statement. Sales rose 7.5 percent to 1.43 billion euros.
Prada, which also owns English shoemaker Church's, cut costs and sold the unprofitable Jil Sander and Helmut Lang fashion houses earlier this year to concentrate on developing its brands. The company and competing luxury-goods makers are benefiting as wealth increases in developed markets and economies expand in China, Russia and India.
``The investments in retail we are making in 2007 will allow a further acceleration of our business,'' Chief Executive Officer Patrizio Bertelli said in the statement. Prada, which has scrapped plans for an initial public offering three times in the current decade, may consider an IPO ``in the near future'' as its performance is ``on target,'' he said.
Revenue at the Prada brand, which accounts for more than four-fifths of the total, came to 1.19 billion euros. Sales rose 22 percent to 154 million euros at Miu Miu, climbed 30 percent to 13.2 million euros at Azzedine Alaia, and increased at a ``double digit'' pace to 18.2 million euros at Car Shoe after tripling in the prior year, the company said.
The clothier generated 27 percent of sales in Italy and an equal share elsewhere in Europe, 25 percent in the Asia-Pacific region, and the rest in the U.S.
Prada competes with rivals such as LVMH Moet Hennessy Louis Vuitton SA, the maker of Marc Jacobs fashions, which has said this week first-quarter sales rose 6.9 percent. PPR SA, the owner of the Stella McCartney brand, yesterday reported an 11 percent increase in revenue at its Gucci Group luxury unit.