Americas +15%, Middle East −22%: Prada grows in spite of the war

First-quarter revenue at Italy’s Prada Group rose 3% at constant exchange rates, excluding the contribution from Versace. Double-digit sales growth in the Americas offset weakness in Europe and the Middle East.

Total group revenue for January to March came to €1.4 billion, broadly in line with the Visible Alpha analyst consensus. Chief executive Andrea Guerra said sales accelerated notably in March and continued to grow in April, leaving aside the effect of the Middle East crisis.

Versace, bought by Prada last year and currently being integrated and relaunched, added €143 million of quarterly revenue. The group said the brand, which recently appointed Pieter Mulier as its new creative director, had performed in line with expectations.

Miu Miu — the smaller label that drove the whole group’s growth last year — slowed: its sales rose 2.4% over the quarter.

“The group delivered another quarter of growth in a disrupted environment and against the toughest comparative base of the year,” Guerra said, adding that the group’s aim is to grow faster than the market.

The regional picture diverged sharply. Retail sales rose 15% organically in the Americas on strong local demand and 5% in Asia-Pacific, driven by China and South Korea. Europe fell 6%, hit by weaker travel spending and a modest decline in local demand. Management did, however, note “encouraging signs on tourist spending” of late.

The Middle East collapsed 22% because of the war in Iran. The conflict affected other regions too: travel has become harder for tourists from the Middle East and from Asia.