Global Luxury Growth Slows Prada Growth Deceleration

Recently, Italy's famous luxury brand Prada released its first quarter earnings, operating income increased by 14.7% over the same period last year, but its growth rate has slowed down. The Asia Pacific region, which has been growing at more than 30%, has also seen a slowdown in growth.

Prada reported that, as of the fiscal quarter of April 30th, operating income was 782 million euros, an increase of 14.7% over the same period last year. Statistics show that last year's mid term earnings report, Prada's revenue growth year-on-year growth is still up to 36.4%, to the fourth quarter of last year, revenue growth fell to 16%, the first quarter of this year's earnings report shows that the growth rate is still declining.

Behind this downturn, we can not ignore that, as Prada's largest market in the world, sales in the Asia Pacific region, represented by China, are also facing a rapid decline. Quarterly results show that the net sales in the Asia Pacific region are 315 million euros, up 24.8% over the same period last year. In the same period last year, the growth rate in the Asia Pacific region was as high as 46.9%, with the growth rate of 53.7% in the Greater China region.

Prada is not a special case. The first quarter earnings report of LVMH group, which owns LV, Cartire and other brands, also showed sales of 6 billion 950 million euros, an increase of 6% over the same period last year. The same period in 2012 was 25%. The growth rate of the group such as Li Feng and Kai Yun has plunged sharply, and has dropped to nearly one digit from nearly 50% growth in recent years.

According to Bain, a consultancy, after three years of two digit growth, high-end jewelry, accessories, cosmetics and artworks are expected this year. Clothes & Accessories And so on, global luxury sales growth slowed to 4%-5%. In 2012, global luxury sales increased by 10% to 212 billion euros, which is expected to reach 220 billion -2220 billion euros this year. Sales of luxury goods in the United States will increase by 5%-7%, and China's annual growth rate will be 6%-8%, while Europe's sales will be less than 2%.

Prada, Hermes, Burberry and other luxury brands are opening or expanding stores in the United States, while increasing advertising spending. At the same time, many luxury brands began to adjust their shop plans in China. For example, GUCCI opened 10-15 stores a year and reduced it to 3-4 a year. LVMH also halted the LV's global expansion plan.