Prada, the renowned Italian luxury group, has set an ambitious target of achieving a 40% growth in revenue in the medium-term, surpassing pre-pandemic levels. The company plans to achieve this by focusing on its online business and maximizing the profitability of its physical stores. This decision comes after Prada witnessed a significant increase in sales during the third quarter, indicating a positive trend for the company.
During an investor presentation, Prada disclosed that its retail sales for the three months leading up to September had grown by 18% compared to the same period in 2019, before the global health crisis. This growth rate marks a remarkable improvement from the 8% growth rate observed in the first half of the year.
Prada has set a medium-term sales growth target of 4.5 billion euros ($5.1 billion), which is notably higher than its 2019 revenues of 3.2 billion euros. It is essential to note that the company reached a record sales figure of 3.6 billion euros in 2013. However, last year, Prada experienced a decline in sales due to temporary store closures and the absence of tourism, resulting in revenues of only 2.4 billion euros.
The luxury group, which is family-owned, has recently undergone a strategic revamp, and it is now starting to see the positive impact of its efforts. Prada aims to achieve an operating profit representing 20% of total sales in the medium term, which is more than double the level in 2019. Additionally, the company plans to increase the proportion of online sales to 15% of retail revenues within the same timeframe.
Prada’s strategy primarily focuses on direct distribution, as it aims to improve store productivity and expand its online presence. The company highlighted that it ended the third quarter with minimal debt and experienced continuous improvement in profitability throughout the given period.
In conclusion, Prada is determined to achieve significant revenue growth by investing in its online business and optimizing its physical stores. With its strategic revamp underway, the luxury group is well-positioned to capitalize on the evolving retail landscape and the growing popularity of e-commerce. Prada’s medium-term goals reflect its confidence in its ability to adapt and thrive in the current market conditions.
Useful links:
– Prada Official Website
– Reuters Article on Prada’s Sales Recovery
