Prada Defies Luxury’s Slump
Prada reported retail sales across its brands rose 18% last year as the company reportedly gears up to buy Versace from Capri Holdings.
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Prada isn’t loafing around. The luxury icon reported retail sales across its brands rose 18% last year as the company reportedly gears up to buy Versace from Capri Holdings. Prada’s trendy little-sister label Miu Miu led the way with record sales growth of 93%.
Miu Miu “Arcadie” bags are on a world tour: Every region except the Americas notched double-digit growth for Prada last year, and the Americas caught up in the second half. Japan led Prada’s sales globally as foreign tourists took advantage of the weakened yen to splurge in Ginza.
That double-digit uptick even includes the Asia Pacific region, where Chinese shoppers’ scrimping has strained luxury’s bottom line.
Luxury’s Not a Monolith
Prada’s one of few brands that has stayed a cut above an industry slowdown. The global luxury market dipped 2% last year, according to Bain, dragged down by a drop of as much as 20% in China (its lowest level since 2020).
Not on the best-dressed list:
- The EU’s largest company by market cap, Louis Vuitton-owner LVMH, only recorded 1% sales growth last year.
- Kering fared worse, with annual sales falling 12% as shoppers opted for quiet luxury over Gucci logos.
But there are glimmers of a comeback: LVMH’s nearly-flat quarter beat investors’ low expectations, while Richemont reported a record holiday quarter as Santa splurged on Cartier cuffs and Van Cleef necklaces.
And while other industries are concerned about incoming tariffs, luxury could be uniquely positioned to absorb the blow. Hermès, which has bucked the slowdown like Prada, said it doesn’t expect Birkin buyers to be phased by any tariff-related price increases — and if they do, they can just take a trip to France to buy straight from the source. Shopping tourism is nothing new for luxury, and the cost of a plane ticket pales in comparison to the price of a Kelly bag.
Mixed Bag: A lot of factors impact luxury spending, not just macroeconomic conditions — from the rise of fast-fashion imitations to TikTok trends and changing tastes. These days, Miu Miu and Hermès are in while Gucci and Versace are out, but that could shift (especially if Prada gives Versace a Miu Miu makeover).
