It wasn’t just the devil who wore it Prada! Since last year, more Greeks have been wearing it, boosting the turnover of Prada Hellas.
The sales of the Greek subsidiary of the luxury fashion house in 2021 exceeded even the pre-pandemic 2019, reaching 3.851 million euros from 1.948 million euros in 2020 and 3.620 million euros in 2019.
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In terms of profitability, the company closed the year with a very small loss of 685 euros mainly due to high financial expenses compared to a loss of 633 thousand euros in 2020.
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In fact, as stated in the management report signed by Alessandra Cozzani, the good performance continues this year as well, since the first half of 2022 “had a very positive trend in sales with an increase of approximately 57% compared to the year 2019 despite the uncertainty in the global economy caused by the Russia-Ukraine conflict”.
The reasons behind the rise
It is of particular interest to see how the Italian brand managed to “turn the game around”.
Game changer in a year that did not start with the best conditions (in 2021, due to the restrictive measures to avoid the spread of the pandemic, the shops were closed for a total of 73 days) was the multi-channel strategy, the increase in the company’s younger customers and domestic consumers.
According to the company, the commercial strategy supported this growth with a more profitable sales mix, while the increase in e-commerce sales also contributed.
“These initiatives combined with the strengthening of the product offering have been particularly rewarding,” it is pointed out.
So from June onwards sales started to increase thanks to both the increase in domestic customers and the recovery of tourism.
The third quarter of the year closed with a 44% increase in sales compared to the pre-pandemic year 2019 and this growth was confirmed in the last quarter of the year when turnover increased by around 30% compared to the last quarter of 2019.
Overall the financial year 2021 closed with an increase of 98% compared to the previous year when stores were closed for a total period of 107 days and 6% compared to the year 2019.
Most of the customers are Greek
The customer mix has changed compared to the pre-pandemic period while previously international customers accounted for the majority of sales, in 2021 domestic customers contributed 55% of total sales.
International tourism is now mainly represented by Europeans, Americans and Arabs, while Asian tourists, who in 2019 made it possible to realize 31% of sales, were still absent during the year (accounting for only 1% of total sales).
Purchase of a building in Bucharest
The luxury brand gives a voice to the Greek market and in terms of investment. In June 2021, the company bought the building where the store has been located since its opening day in 2008, at 17 Bucharest.
“This important strategic decision was taken with the aim of consolidating the commercial position of the Prada group in Greece,” it states.
The investment of 19 million euros has been fully financed with a new capital contribution of a total amount of 20 million euros, of which 1.5 million euros have been allocated to equity capital and 18.5 million euros to a premium.
In the first quarter of 2022 the company carried out a refresh of the store with the aim of enhancing brand awareness and making the location more attractive to customers.
The management is convinced that the positive trend in sales combined with the reduction of fixed costs mainly due to the elimination of rents after the purchase of the building and the financial costs resulting from the capitalization of the company will allow a recovery in profitability.
From a financial point of view, the company can request direct support from its parent company, it is noted.