Prada Leather Sales Drop, Thanks to Slow Tourism

Tourists love them some leather goods.
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Eliza Brooke
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Tourists love them some leather goods.
Julia Nobis walks the Prada Fall 2014 show. Photo: Imaxtree

Julia Nobis walks the Prada Fall 2014 show. Photo: Imaxtree

Prada may still be the gold standard when it comes to the world of design, but the company's sales slowed in the first part of the year. On Wednesday, Prada Inc. reported that in the six months ending July 31, net revenue grew just 1 percent to roughly $2.34 billion. That compares to 12 percent growth during the same period the year prior.

Sales had ups and downs by region: Asia Pacific dropped 2 percent in retail revenue, but the Americas, which had showed better growth during the first quarter, saw their sales bumped up 8 percent. The Middle East and Japan did even better, at 16 percent and 10 percent growth, respectively. Prada hasn't released exact numbers for how much cash each market is bringing in — these were preliminary sales figures — but as of the first quarter, Asia represented 41 percent of the company's business with Europe following at 31 percent. So the drop in the former is kind of a bummer.

As for that flailing wholesale business, which dropped 25 percent in the first quarter, things have stabilized, with sales growing 1 percent for the half year.

Sales of leather goods fell 5 percent, which Prada attributes to a decrease in tourism (particularly in Europe) — and tourists are all about a Prada bag. On the upswing, men's is doing well, as is clothing and footwear. To that end, Prada-owned British shoe brand Church's saw its sales grow 14 percent. In fact, Church's has been consistently doing quite well lately.

Meanwhile, Miu Miu is outpacing Prada in growth, although the larger still has a much larger share of the company's business.