Prada 2016 revenue down 10 percent as Asia, Japan lead global decline

Italian fashion group Prada  reported a 10 percent drop in revenues on Monday as sales fell across all regions, including Japan and its top market Asia Pacific.

Consolidated revenues in the financial year through January 2017 fell to 3.18 billion euros (3 billion pounds), down from 3.55 billion euros a year before. At constant exchange rates sales were down 9 percent, in line with a Thomson Reuters estimate of 3.2 billion euros.

The overall fall -- 10 percent at current exchange rates, nine percent at constant rates -- was broadly in line with expectations for the luxury handbag producer.

The biggest drop was registered in Japan, where sales fell 13 percent after five consecutive years of growth. The company attributed the trend to a reduced flow of tourists from China due in part to the yen appreciation.

Sales for the rest of Asia-Pacific, its biggest market, were down 12 percent but Prada said the rate of decline had slowed in Hong Kong and Macau while "rapid growth" resumed in mainland China from the third quarter.

Europe was hit by a reduction in the number of high-end shoppers visiting France and Italy, while Russia, which registered double-digit growth, and post-Brexit Britain bucked the trend.

The British market, subdued in the first half, was helped by a tourism boom fuelled by the fall of sterling in the wake of the June 2016 vote to leave the European Union.

After several years in the doldrums largely as a result of an economic slowdown in China, Prada predicted in August that it would return to earnings and sales growth in 2017 after taking the scissors to its cost base.

It is also aiming to double online sales in each of the next three years.

"This past year we implemented a profound phase of business process rationalization, still underway, and identified important strategies to secure the Group's future growth," said chief Executive Patrizio Bertelli in the statement.

"I am confident that this new global vision will enable our brands to fully express their strong potential, and generate sustainable growth."

Prada will hope the second-half momentum is sustained as their 2017 spring-summer collections begin to hit boutiques around the world.

After several seasons in rival Gucci's creative shadow, Miuccia Prada's latest collection was hailed as a return to form at the catwalk shows in Milan in September.

With reporting from AFP