September 24, 2012 / 10:36 AM / 5 years ago

UPDATE 1-Prada H1 net profit surges 59.5 percent

* Asia-Pacific market still driving growth

* Own brand and Miu Miu sales revenues up

* Directly operated store network expanded to 414 (Adds details)

HONG KONG, Sept 24 (Reuters) - Italian fashion house Prada SpA, which competes with Louis Vuitton and PPR SA’s Gucci, posted a 59.5 percent jump in net profit for the first half of this year, bolstered by Asian spenders who have continued to shield the company from slower growth being felt by competing luxury companies.

The Milan-based company, popular for its coloured Miu Miu dresses and leather handbags, said net profit for the first six months of the year was 286.4 million euros ($372 million)compared to a forecast of 290.3 million euros from six analysts polled by Thomson Reuters.

China’s luxury market, upon which global luxury powerhouses have become increasingly dependant, has been hit by weaker demand than expected due to slowing growth and a crackdown by Beijing on conspicuous consumption.

British fashion house Burberry Group Plc’s warning on Sept. 11 that its sales growth in China was far slower than expected spooked luxury investors and raised concerns that the entire sector was in danger of stumbling.

For Prada, the company’s own brand and Miu Miu have been the main drivers of growth with sales revenue up 40.4 percent and 23.7 percent respectively.

The Asia Pacific market delivered the highest growth rate, accounting for more than a third of Prada’s total net revenues. Greater China sales rose 50.2 percent to 334.6 million euros for the first six months.

Analysts said Prada’s leather goods sales tend to be more resilient than apparel during an economic downturn and expect the company to outpace its competitors due to its strong positioning in handbags and its smaller store network.

Prada said while market conditions would remain challenging for the short term with more general volatility, it remains “confident about the near future and will continue to pursue the retail focused strategy which is an essential pillar of our long-term growth prospects.”

Prada has continued to push forward with its retail network, opening 28 new stores, but closing two, and taking the total number of directly-operated stores to 414 at the end of July 2012.

Listed in Hong Kong, Prada’s shares have gained 71 percent so far this year, substantially outperforming the benchmark Hang Seng Index which is up 12 percent in the same period.

Prada reported revenue of 1.55 billion euros for the first half of the year on Aug. 6.

$1 = 0.7699 euros Reporting by Farah Master; Editing by Matt Driskill

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