Prada’s Recovery Amidst China’s Economic Slowdown
Prada, the renowned Italian luxury fashion house, has declared that the worst of China’s economic downturn is over. The company reported a 9% increase in net revenues for the first nine months of 2025, driven by the success of its Miu Miu brand. This positive development has alleviated pressure on the luxury sector, although Prada’s CEO, Andrea Guerra, cautioned that the glory days of the past decade are unlikely to return soon.
Prada’s Financial Performance
Prada, which agreed to acquire Versace earlier this year, experienced a 9% rise in net revenues during the first nine months of 2025. This growth was primarily fueled by its Miu Miu clothing and accessories line.
Regional Sales Growth
The sales growth was largely attributed to the Asia-Pacific region, Prada’s primary market, which saw a 10% increase at constant exchange rates over the nine-month period. The company noted “certain improvement” in China during the third quarter.
“I believe the worst is over,” Guerra told analysts, referring to a “plateau” in China following years of recession, with sales slightly better than expected during the crucial Golden Week in October.
However, Guerra emphasized that the past decade’s booming sales are unlikely to return in the near future. From 2017 to 2021, China’s luxury market tripled in size. Post-COVID sales boom projected Chinese luxury consumption to reach 35% to 40% of the global total, according to consultancy Bain.
China is pivotal for the global luxury industry, valued at $400 billion and accounting for roughly one-third of global luxury sales. However, local demand has dwindled amidst China’s economic growth slowdown.
Luxury Sector Recovery
Despite China’s economic challenges, other French luxury groups like Hermès, LVMH, L’Oréal, and Kering have shown tentative signs of recovery this month.
Prada’s growth continues to be led by its smaller brand, Miu Miu, which saw a 29% increase in retail sales during the third quarter. Meanwhile, Prada’s retail sales dipped by 1% in the same quarter, showing a slight improvement compared to the second quarter.
Key Questions and Answers
- What does Prada’s 9% income increase signify? The increase indicates that Prada is recovering from the impact of China’s economic slowdown, with the Miu Miu brand being a significant driver.
- Why is China crucial for the luxury industry? China represents approximately one-third of global luxury sales, making it a vital market for luxury brands like Prada.
- What challenges does the luxury sector face in China? The luxury industry is grappling with decreased local demand due to China’s economic growth slowdown.
- How are other luxury brands faring in China? Despite challenges, French luxury groups like Hermès, LVMH, L’Oréal, and Kering have shown signs of recovery in China.
