Lower Profits at Prada
Lower Profits at Prada
In the last several months, Prada has been reporting lower profits than usual. Analysts predicted a 28 percent fall in profits for the Italian luxury brand, and while there was a fall it was limited to 23 percent, an overall profit loss of €56.3 million over a six month period. This decline in profits has been attributed to a combination of reasons, store expansion without also increasing the production of new merchandise being one. The recent issues with the Chinese market has caused a fall in demand for luxury goods in China, which in turn has been another main reason for the brand’s drop in profits.
Chanel, on the other hand, reported a record jump in profits in 2014 – a 20 percent increase in profitability, bringing in a total of €1.23 billion. Analysts have reported that this is due in part to the popularity of Chanel in the Chinese market.
Prada representatives have reportedly stated that efforts to reverse this profit drop include reducing costs by making practices more efficient, and reducing the number of stores opened globally next year. The introduction of the new “Inside Bag,” starting at €2,050 and costing up to €6,000 each will no doubt help stimulate profits.
Lower Profits at Prada
