If you are looking for a global luxury brand, you don’t need to look further than Prada (HKG:1913). Whether we are talking about shoes or handbags, Prada has managed to establish a name that has withstood the test of time. Consumers looking for the very best in luxury quality look to the Prada brand. From Europe to the Americas to China, elite consumers flock to this powerhouse Italian fashion brand.
Well, it appears that Prada is showing some signs of weakness due to the economic pain being felt in China. As we have mentioned earlier, China is still growing. There is no doubt about that. However, the rate at which the Chinese economy is growing is at its slowest point in over two decades. For the longest time, the global economic community could look to China as a great source of inspiration for GDP growth. In fact, in the depths of the great financial crash in 2008, China was looked at as the economy that would help provide a pillar of stability for an otherwise depressed global financial market. Well, China has succumbed to economic softness, and this has impacted the buying habits of its rising middle class.
There is a huge demand in China for luxury goods coming from France and Italy. Prada previously had been growing its sales volume by double digits. Prada has been on a roll lately due to its increasing presence and popularity in the Chinese and other Asian markets. Well, thanks to the global economic slowdown, and the Chinese economic growth decline in particular, Prada’s sales were off 1% in 2014 on a year-over-year basis. Considering the overall soft economic signs for 2015, it appears that Prada sales figures might not recover anytime soon.
