Prada posted a net profit of €180m (£157m) in the six months to July – a rise of almost three quarters on last year’s €103m profit. The Italian luxury fashion house said the surge was down to strong sales of its leather handbags and wallets to Chinese and Asian customers. Asia-Pacific sales grew an ‘outstanding’ 35% to €368m, the company said, with consumers in the Greater China region the most anxious to get their hands on the latest piece of Prada arm candy.
Prada’s other brands – which include Miu Miu, Car Shows and Church’s – also saw strong sales in Asia. So it looks like Prada’s decision to launch its IPO in Hong Kong was an astute decision. In June it became the first Italian company to go public in Hong Kong, hoping to get a foothold in the Chinese market at a time when China’s middle class is growing and becoming increasingly brand-conscious.
Meanwhile Debenhams’ update suggests not all high-street retailers are on their last legs. The department store group said it expects full-year profit to be higher than analyst predictions, after a summer of discounts and promotions helped attract cash-strapped customers. Like-for-like sales grew 0.4% in the nine weeks to the end of August – a rather flat sales figure but compares to a fall of 0.4% for the rest of the year.
Debenhams also said its market share had risen across all products, which it partly attributed to starting the summer sale a week early to steal a march on competitors. Its ‘Spectacular’ promotions, where it cuts prices by 25% across the store, also proved popular amongst customers.
Still, the aggressive discount tactic suggests the consumer spending squeeze is still a concern for the department store. Luxury brands like Prada, however, seem to be facing no such qualms.