September 21st, 2011
12:45 AM GMT
Hong Kong (CNN) – Asia may not be the elixir to the world’s economic ills but it sure seems to be the pill that’s pushing one luxury goods maker to some great highs.
On Tuesday, Italian fashion house Prada announced a stratospheric 74.2% rise in net income for the period from January to July 2011, compared to the same period in 2010.
In hard cash numbers, that’s more than $244 million banked from the first half of this year versus $141 million from the first half of last year.
Who are the people powering these profits?
That would be Asia-based consumers. They are the ones buying up those high-end dresses, bags, shoes and other luxury accessories. Not the Italians, not the French, not the Americans.
In fact this year, Asia (excluding Japan – that’s the way Prada categorizes it) registered 33% of the company’s net sales. And like last year, Asia was Prada’s largest market in the world.
Breaking it down, Europe was the next most important region for Prada, contributing 22% to total net sales.
Italy, Prada’s home turf, took a 19% slice of the sales pie.
And it’s interesting to note that North America, with more than 450 million people, contributed 15% to Prada’s net sales while Japan, with just 127 million people, made up a competitive 10% of the total.
Now, delving deeper into Asia’s drivers, the reason for Prada’s revenue rocket is simply this: Greater China is driving greater demand.
This year, the Prada Group has 29 stores in mainland China, Hong Kong and Macau. By 2013, they’re boosting that total to 50 stores. By that year Prada expects about 50% of the Group’s planned 550 stores will be found right here across Asia.
None of this should really be a surprise, though.
If there was any clue as to where Prada’s strategic compass was pointing all we had to do was look to China: last January, Prada had it’s first-ever runway show outside Europe in Beijing.
Looking ahead, let’s cue the music for the Italian fashion house. As Prada preps for a greater Asia expansion, we should well expect to see more models on catwalks across the region very soon.
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