Despite continued focus on a slowdown in China’s luxury sector, Prada SpA has recently reported that as far as it is concerned, the present is quite positive. At the close of the first half of 2012, Prada saw a 60% increase in net profit, and, as Jing Daily reports, most of that increase came from Asian consumers. Many luxury brands have become cautious of depending on Chinese shoppers for profits amidst reports of a slowdown in China luxury sales. However, according to the China Post, Prada’s Chief Executive Officer Patrizio Bertelli says that there is no need for hysteria regarding the slowdown in China and urges brands to keep calm about the future of the luxury market.
CNBC compares the sales in China from Burberry, which has recently reported slower growth in China than expected, and Prada, which remains cautiously optimistic. Leather goods appear to be more resilient in the economic climate than apparel, which is the basis of much of Burberry’s sales. Meanwhile, Prada relies on its leather products, which most likely contributes to its recent success. Hermès International SCA has also seen an increase in profit due to sales of its silk scarves, Birkin bags, and other items, according to the Wall Street Journal. WSJ also reports Bertelli’s assertion that Chinese consumers need to be stimulated to continue the spending that many brands have hope for and expected. Bloomberg clarifies that Prada does, in fact, give its shoppers something to be excited about, as the company updates its products each year to put new items in front of the consumer.
It appears that with Prada’s recent notable success, Bertelli feels confident in seeing the future optimistically, albeit with a degree of caution. The market will certainly be kept on close watch, but the achievements of those brands posting increased profits are as significant as those reporting less success in recent months.