Prada Group experienced an 18% increase in sales in the third quarter, largely driven by the success of its sister brand Miu Miu. The brand has gained popularity among Gen Z consumers and young celebrities.
Prada Group is bucking the luxury slowdown, largely thanks to its Miu Miu brand. While competitors like LVMH and Kering reported disappointing third-quarter results due to declining demand in China, Prada is thriving alongside Hermès as one of the few luxury houses experiencing growth.
In the latest quarter, retail sales for the Italian fashion group rose by 18%. Sales at the Prada brand increased by 2%, but it was Miu Miu that truly stood out, boasting a remarkable 105% sales surge compared to the same quarter last year.
Founded in 1992 by Miuccia Prada, the granddaughter of the group’s founder, Miu Miu is the more youthful and affordable sister brand of Prada. Its recent success can be attributed in part to its growing Gen Z fan base and the cult status of items like its microskirt, which went viral after its 2021 debut and was worn by influencers such as Emily Ratajkowski, Hunter Schafer, and Hailey Bieber.
Blanca Zugaza Escribano, a fashion and luxury consultant at Metyis, shared with Business Insider that Miu Miu exemplifies a luxury brand that is effectively tapping into what resonates with Gen Z—a consumer demographic that is increasingly crucial for luxury labels to engage.
However, the brand’s success appears to have surprised even company executives. “I would be lying if we said we predicted doubling our business year on year,” said Andrea Guerra, CEO of Prada, during a call with investors on Wednesday.
Things are progressing so positively that analysts were informed Prada plans to expand Miu Miu stores and open new locations in areas where it currently lacks a presence.
Prada Group’s CFO, Andrea Bonini, noted that Miu Miu’s success has positively impacted Prada by enhancing profit margins and allowing for further investment in the Prada brand. “Additionally, Miu Miu likely wouldn’t be experiencing this level of growth today without being part of a larger group,” Bonini remarked.
In a note to clients on Wednesday, Luca Solca, an analyst at Bernstein, stated that Miu Miu’s trajectory “confirms our belief that the market is underestimating the growth potential of Miu Miu over the next 12 to 18 months.” He added that it also raises concerns that Prada, which still constitutes the bulk of the business, may have already reached its peak growth potential.
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