According to a recent article by Business of Fashion (reposted by Reuters) Italian fashion house Prada, stated sales in Asia have surged into double digit territory as the world struggles to recover from the Covid-19 pandemic. Chief Executive Patrizio Bertelli emphasised the importance of the Asian and in particular Chinese markets to the sales growth rates of the luxury group, as it is difficult to predict such growth in the American market.
In an interview with WWD magazine, Bertelli said “we are confident that this trend can continue also in months to come” along with the observation that consumer expenditure behaviour has returned to “fast and sustained” rates.
Meanwhile, Bertelli’s son Lorenzo in a separate interview told The Business of Fashion that he sees the possibility of succeeding his parents as the company chief in the future, saying “I like to challenge myself and solve problems. I simply want to enjoy what I’m doing. I’m now enjoying what I’m doing. And so…why not?”
The 32-year old retired from his career of race-car driving to assume the executive role as head of marketing and communications in September 2017. He was tasked with the mission to bring Prada’s lagging digital presence to the same calibre of its competitors.
It’s no secret that luxury fashion houses have grown incredibly dependent on the expanding market of Asian consumers, and the rate of sales growth in this region is crucial to the share prices of these companies. Just last year in May, Prada shares plummeted to its lowest level since 2016, after their profit margins took an unanticipated hit as a result of declining Chinese spending.
Nevertheless, though Prada sales have not been at the high levels as one would expect given the constant praise by critics, it remains a coveted name and steadfast as one of the top ten global luxury fashion brands. Critics and analysts also believe that Prada is likely to be on the rise in the coming years, not only because of its improvement in marketing – especially in the digital sphere – but also because of the expected growth of luxury retail sales.
Market research firm Deloitte forecasted sales in the luxury fashion industry to grow between 6 to 8 percent annually up to and through 2024, which is twice as rapid as the growth in sales predicted for the broader retail industry. These bold predictions are attributed to the ever-growing online presence of brands and sales platforms, however, these forecasts were made long before the Covid-19 pandemic, which introduced a strong wave of uncertainty.