Italian fashion group Prada SpA has reported a 22% increase in net revenue in the first quarter, thanks to strong sales of its Prada loafers and Miu Miu pocket bags. This marks the first time that Prada, which is listed in Hong Kong, has issued a first-quarter trading update. The growth was led by Japan, Europe and Asia Pacific, while the Americas saw the slowest demand, expanding at 5%. Prada and Miu Miu's latest designs have proved popular with fashionistas around the world. Miu Miu's pocket bag, which sells for €2,100 ($2,295), was particularly popular, according to Lyst, which tracks the most-searched-for brands and products on its own app and social media.
The fashion group recently reorganised its governance with Miuccia Prada, granddaughter of the label's founder, and Patrizio Bertelli stepping down as co-CEOs and Andrea Guerra taking on the leadership role. Miuccia Prada and Bertelli are still involved in running the group as executive directors. Prada is also designer for the namesake label, along with Raf Simons, and creative director of Miu Miu. Miu Miu, which is six times smaller in sales than Prada, saw revenue jump 42% during the three months to the end of March, twice the rate of its sister brand.
In a call with analysts, Guerra said that the smaller label is attracting a younger audience than Prada. Guerra reiterated that the priority this year is boosting store productivity, while Bertelli called the quarterly performance "solid," adding that he's confident for the future. Guerra said on the call that the company was "happy" with its financial performance in April and sees potential for further price hikes on some higher-priced products. Prada, whose shares have risen about a quarter so far this year, is likely to release targets shortly, in the wake of Guerra's appointment, Morgan Stanley analyst Edouard Aubin wrote in an April 20 note. "We would expect a capital markets day from the company to upgrade its mid-term financial target soon," he said.
However, CFO Andrea Bonini declined to give an update to analysts on Prada's plans for a secondary listing.