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Prada Group sales grew 17 per cent to €4.7 billion in 2023, driven by a strong performance at Miu Miu, particularly in the Chinese market.
Led by Miuccia Prada, Miu Miu has been on a sharp growth trajectory since 2022. It has been credited for driving trends such as ballet flats, panties over tights, a rebellious take on officewear and the low-rise ultra-mini skirt — trends that, alongside its mini leather handbags, have particularly resonated with the young Chinese consumer. Its growth continues to outperform the group’s largest brand, Prada.
Prada’s retail sales grew 12 per cent in 2023, while Miu Miu’s jumped 58 per cent year-on-year. In the fourth quarter, Miu Miu sales soared by 82 per cent. (The group also owns Church’s, Car Shoe, Pasticceria Marchesi and Luna Rossa.)
“Over the last year, the strength of our brands’ creativity has enabled us to continue to capitalise and strengthen [our] desirability,” said Lorenzo Bertelli, marketing director and head of CSR, who is set to take over the company from his parents Miuccia Prada and Patrizio Bertelli in the coming years. Andrea Guerra has been leading as CEO since 2022. “What Miu Miu is doing today is [part of] a long journey. We had a tough couple of years, maybe three years or so [ago], and now we are recapturing our journey, our women and our trajectory,” said Guerra.
Prada’s growth has outpaced the market, which has been struggling throughout 2023 due to weak consumer demand, as the aspirational customer’s wallet continues to shrink. Hugo Boss, which reported its full-year earnings today, presented a relatively cautious outlook: despite reaching its €4 billion target two years in advance, it warned that reaching €5 billion might take longer than expected. For Prada, a focus on full-price sales and price increases has helped it stay competitive.
“As expected, Prada has reported a strong Q4, with Miu Miu continuing to benefit from remarkable traction especially with the Chinese cluster,” Jefferies analysts James Grzinic and Frederick Wild and associates Bhumi Kanabar and Elizabeth Moore said in a note. “The outlook seems suitably confident as it talks to a ‘firm ambition of delivering solid, sustainable, above-market growth’. But at this juncture it is unclear whether this is sufficient to drive the required upgrades to support the strong gains of late.”
Growth was mainly driven by retail sales, which were up 17 per cent year-on-year to €4.2 billion. Wholesale, which makes up a smaller proportion of sales, grew 13 per cent. Royalties were up 36 per cent with growth in both beauty and eyewear.
Japan was the best-performing region in 2023, with growth of 44 per cent driven primarily by local clients. Europe was up 14 per cent due to strong domestic and tourist spending, and the Middle East grew 10 per cent. APAC saw 24 per cent growth. “With the Chinese cluster, we’ve seen very good numbers, very good growth on a two-year stack, which is more meaningful and stable in Q3 and Q4, predominantly local but traveller transactions are growing faster,” said Bertelli.
The Americas remained flat this year. “I really hope that North America will be the fantastic good surprise for 2024,” said Guerra. “I think there are a lot of reasons why we would see this and 50 per cent of the answer is on us — we are underrepresented in the US, we have not always curated all the aspects of North America efficiently. We’re putting in a tonne of work [...] so I think the US has to be a leading wagon for us in our next years.”
The group reported a 22.5 per cent improvement of its EBIT margin in 2023, thanks to higher pricing. Operating profit rose 37 per cent.
Prada did not provide its financial guidance for 2024, but Guerra is optimistic. “2024 will be a year of some acceleration, some deceleration, some ups and downs [but] I’m pretty sure it will be a more linear path throughout the year and our performance for sure will be above market-growth rate,” he told investors. “We are in a more normal market, we are in a more normal world.”
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