By Elisa Anzolin
MILAN (Reuters) -Italy’s fashion house Prada said on Thursday the worst of China’s downturn was over, easing pressure on the luxury sector, though it warned the glory days of the last decade were unlikely to return.
Prada, which agreed to buy Versace earlier this year, reported a 9% increase in net revenue for the first nine months of 2025, driven by its Miu Miu clothing and accessory brand.
Sales growth was driven by the Asia Pacific region – the main market for the group – with a 10% increase at constant exchange rates in the nine months. The group flagged “some improvement” in China in the third quarter.
“I think that the worst is over,” Prada Chief Executive Andrea Guerra told analysts, referring to a “plateau” in China after a years-long downturn, with sales a bit better than expected during the important Golden week holiday in October.
“But I don’t think that we will ever see again, in the near future, what we have seen in the last decade.”
From 2017 to 2021 China’s luxury market tripled in size and in the post-COVID sales boom Chinese luxury consumption was predicted to have reached 35%-40% of the world’s total, according to consultancy Bain.
MIU MIU THE GROWTH DRIVER, PRADA BRAND LAGS
China is key for the $400 billion global luxury sector and accounts for around a third of global luxury sales, but has seen local demand slide amid slower Chinese economic growth.
French luxury groups Hermes, LVMH, L’Oreal and Kering, however, have this month flagged tentative signs of a recovery.
Prada’s growth continued to be led by the group’s smaller label, Miu Miu, which posted a 29% rise in retail sales in the third quarter. Retail sales at the Prada brand fell 1% in the quarter, improving slightly versus the second quarter.
Retail sales account for 90% of the Prada group’s net revenues, which totalled 4.07 billion euros in the January-September period.
CEO SAYS FINAL APPROVALS FOR VERSACE DEAL GETTING CLOSE
Earlier this year Prada clinched a $1.38 billion deal to buy smaller rival Versace from Capri Holdings in a move that unites two of the biggest names in Italian fashion.
Prada’s CEO said he expected the last authorization needed for the deal’s closing to come in the next fifteen days.
Another major Italian fashion house has recently emerged as a potential takeover target.
The late designer Giorgio Armani instructed his heirs to either sell his company – with priority given to LVMH, L’Oreal and EssilorLuxottica – or list it on the stock exchange.
Asked whether Prada might be interested in managing Armani’s fashion business if it were acquired by L’Oreal, Guerra said that it did not seem realistic at this stage.
(Reporting by Elisa Anzolin; Editing by Valentina Za, Adam Jourdan and Elaine Hardcastle)
