PRDSY Prada Spa (PK)

By Manuela Mesco 

MILAN--Italian luxury goods firm Prada SpA saw its 2015 sales remain largely flat, the latest evidence of a slowdown that has dogged the company for the past two years.

The house controlling the Miu Miu, Prada, Car Shoe and Church's brands said Wednesday its preliminary sales for the year ending in January 2016 stood at EUR3.5 billion ($3.9 billion), hampered by China's slowing economy and a strong U.S. dollar.

Prada's sales growth only inched up 1% in 2014, a sharp slowdown from growth of 30% in 2012 and 9% in 2013. Net profit also declined 28% in 2014 after a sixfold increase between 2009 and 2013. The brand--once a white-hot name--has lost power in recent years, as shoppers around the world shun traditional logos.

Last year, sales in the Asia-Pacific region fell 4% on the year at current exchange rates, which is stripped of currency fluctuations, and 16% at constant exchange rates.

Echoing the experience of other fashion firms, Prada suffered a slowdown in China, as a continuing crackdown on corruption has stymied demand in the market.

However that slump has been partially offset by Chinese consumers' shopping in Europe and Japan, where handbags and other luxury items are cheaper due to the exchange rate and the lack of high import duties. European sales rose 6% at current exchange rates.

Chief executive Patrizio Bertelli said Wednesday that volatility in currency markets and deteriorating geopolitical conditions in many world regions "have made prices fluctuate widely and diverted tourist traffic in sudden and unpredictable ways."

Sales in the American market decreased 9% in real terms because of a stronger dollar that reduced the number of tourists to the region, the company said.

Japan continued the strong growth in revenue it has seen since 2010, with an 11% increase at current rates last year.

Prada has been responding to the cooling of its business by making operations more efficient in an attempt to revive its profits. However, it warned it didn't expect to record major progress during 2015. Prada will release its full 2015 earnings in the first half of April.

The Hong Kong-listed company is also launching new products, particularly in the handbags division--traditionally the house's engine of growth. These include the "Inside" model, which hit stores last summer and marked a push into higher-price goods.

Write to Manuela Mesco at manuela.mesco@wsj.com

(END) Dow Jones Newswires

February 17, 2016 10:10 ET (15:10 GMT)

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