Prada is Experiencing a 25% Slump in their Revenue Sales
Prada sales around the world seem to have dropped since the company has reported a 25 percent drop in their collective net profits for the first half of this year. The company claims that because of an increase in Chinese sales, they were able to keep their profit margin from dropping lower.
Fashion enthusiasts assume the company has been hit by the global luxury merchandise spending slump. Although Prada Chairman Carlo Mazzi commented to the press that the company actually expected a growth in sales and a huge profit return in 2017. Since 2014, Prada saw a net profit boost apart from the addition of new stores.
Even though the Prada Group makes most of its sales from the Prada brand, they also own the Car Shoe label and another popular fashion group, Miu Miu. The Prada franchise stated that due to government measures, China’s sales in August helped replenish some of their sales profit. Recently in April, Prada assumes that Chinese shoppers have fled to their local Prada stores to avoid paying certain international taxes since the country raised its international packaging fees and have put a stop big luxury item smuggler rings.
The total amount of their profits has rounded up to about 141.9 million euros or about $157.7 million dollars for this half of the year. Prada assumes that their business was behind this year due to the recent decline in European tourism. Although the company has had sale troubles in certain areas around the world, some countries like Russia and the U.S have gained a bit of growth. Other countries in Lain America have also remained stagnate in their revenue sales.
Not only does Prada have to worry about their declining sales, but the company has reportedly had their shares drop almost 35 percent since last year. Prada is still holding on to the hope that their profits for the next half of this 2016 year will improve. The fashion retailer hopes to achieve their revenue growth goals but cutting a few expenses in their company and increasing the amount of sales they have monthly.