Prada Quarterly Profit Down 38 Percent

The luxury goods maker reported a 38% fall in quarterly profit as sales in Greater China are hit by a major slump due to slower economic growth. This summer, the yuan was devalued and subsequently mainland tourists were hesitant about purchasing luxury goods in Hong Kong, a traditional hot stop for shopping. There has been 26% decline in Greater China from August- October. Net income fell to 46.5 million euros during this period from the 74.47 million euro that the previous year saw. Some attribute this fall to the problem of price gap differences of products, whereby products are significantly cheaper in some country than in others. Prada wants to address this issue and discourage people from travelling to other countries for cheaper goods.

Chief financial officer Donatello Galli points to an unstable financial market and the global security concerns that dissuade tourism, saying that “market conditions are still quite complicated”.