Net revenues at Italian fashion group Prada rose 2% to €1.6bn (£1.4bn) in the six months to 30 June, compared with the same period in 2018.
It comes after the Milan-based company said earlier this year that it would stop offering seasonal markdowns in its stores and be more selective with wholesalers to support full-price sales, in order to lift margins.
Prada said the decision to stop end-of-season Sales and rationalise its wholesale channel has been “well received by the market”.
The in-store retail channel declined 3% as a result of this phasing out of promotional Sales, while the wholesale channel rose 14%, driven by online sales. The recent rationalisation has not yet had any impact on that part of the business, but Prada warned that it will affect results in the short term.
Sales in Europe grew by 6%, mainly driven by wholesale, while sales in the Americas sales were also up 6%. The Far East was down 4%, as sales were negatively impacted by social unrest in Hong Kong.
Operating profit decreased 5.7% to €150m (£134m). EBITDA was €491m (£448m), or 31.2% of revenues, a drop from 32.7% in the first half of 2018. EBIT came to €150m (£134m), or 9.6% of revenues, down from 11.3% during the same period last year.
Patrizio Bertelli, Prada CEO, said: ”Our strategic decision to stop seasonal markdowns and to rationalise the wholesale channel has been well received by the market: full-price retail sales increased across the main geographies and product categories, reflecting the soundness of our choice.
“We believe that improving consistency in pricing will reinforce the relationship with customers and enhance product value.
“Our Prada and Miu Miu collections are receiving significant appreciation from the market, confirming the strength of our stylistic leadership.
“We are strongly committed to driving digital technology across the business, leading to more efficient decision making, as we are aware that digital innovation is key to compete in an evolving market. Executing this program is the necessary step towards sustainable revenue and margin growth, which we will target by strengthening our brands’ cultural heritage – essential to our Group’s future.”