Prada defies global slowdown of luxury goods market

Robyn Duffy, senior analyst for consumer markets at RSM UK comments on today’s results from Prada Group: ‘Prada’s year-end results show strong growth despite the global slowdown in sales for the luxury goods market at the end of 2023. 

‘The group’s performance was driven by strong demand in Asia, led by Japan, where an aging population is seeking out goods that align with their values including craftmanship and quality. The region also benefitted from Chinese tourists who continue to favour travel closer to home instead of Europe and the US.  

‘Miu Miu, Prada’s sister brand, though smaller in size is quickly building momentum with retail growth up 58%. It’s viral products, celebrity-packed runways and hyped collaborations have enabled the brand to make its mark, particularly in the minds of younger consumers.   

‘The new direction for the business since CEO Andrea Guerra joined has delivered a sharper focus on near-term priorities including product innovation, events and a stronger digital footprint. Smart longer-term plays such as the purchase of Prada’s New York Fifth Avenue store have also cemented the brand’s presence in one of the most desirable real estate locations in the world. 

‘2024 brings some uncertainty to the luxury goods sector, with travel trends in the US and Europe normalising, cost-of-living pressures dragging on consumer sentiment, and China’s full spending potential yet to be unleashed. But Prada has positioned itself well to withstand current pressures and enters the coming financial year in good health.’