Prada 2014 profit falls for first time since listing as China, Europe weaken
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Italian luxury goods company Prada SpA reported its first drop in annual net profit since it listed in Hong Kong four years ago, as growing retail sales in the Americas and Japan failed to offset declines in Greater China and Europe.
The company reported on Monday its 2014 net profit fell 28 percent to EUR450.7 million (USD489.8 million), slightly below forecasts, as overall annual sales dropped 1 percent. Asia-Pacific sales, which accounted for more than a third of the Milan-headquartered company’s business, also fell 3.1 percent.
Like other luxury goods makers, Prada has seen weaker sales in China and Hong Kong amid a government crackdown on corruption, including bribery which often takes the form of lavish gifts to officials.
Questions & Answers
Q.Which regions experienced growth in Prada's retail sales?
Which regions experienced growth in Prada's retail sales?
Prada saw growing retail sales in the Americas and Japan during the reported period. However, this growth was not enough to counter declines in other significant markets for the luxury brand.
Q.What contributed to the decline in Prada's sales in Greater China and Hong Kong?
What contributed to the decline in Prada's sales in Greater China and Hong Kong?
Weaker sales in Greater China and Hong Kong were largely attributed to a government crackdown on corruption. This initiative included bribery, which often involved lavish gifts to officials, impacting luxury goods demand.
Q.What was Prada's total net profit for 2014?
What was Prada's total net profit for 2014?
Prada's total net profit for 2014 was EUR450.7 million, equivalent to USD489.8 million. This figure represented a 28 percent fall compared to the previous year and was slightly below forecasts.
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