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MILAN, Prada — Prada SpA reported a 28.2 percent drop in full-year profit as fewer Chinese shoppers splurged on $2,950 leather handbags and other luxury products.
Net income in the year through January fell to 450.7 million euros ($490.9 million), Milan-based Prada said Monday in a statement. Analysts had predicted 468 million euros, according to the average of estimates compiled by Bloomberg.
Prada plans to open fewer stores and introduce more bags priced in the range of 1,000 euros to 1,200 euros as it seeks to revive revenue that fell last year amid a slowdown in China. The moves are designed to redress errors such as having an overly expensive product mix and a lack of novelty that have led shoppers to spend elsewhere, according to Exane BNP Paribas.
“There has been a major overhaul of certain internal production processes, the effects of which will be visible from next year,” Prada said in the statement.
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Revenue fell 1 percent to 3.55 billion euros, the Milan- based owner of brands including Miu Miu said in February.
By: Andrew Roberts and Lulu Yilun Chen; editors: Matthew Boyle, Paul Jarvis and Janet Ong.
