Finance
Prada says 'worst is over' in China but heady growth unlikely to return
Published by Global Banking & Finance Review®
Posted on October 23, 2025
3 min readLast updated: January 21, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on October 23, 2025
3 min readLast updated: January 21, 2026
Prada sees recovery signs in China but warns growth won't match past levels. Miu Miu drives sales, and Versace deal is close to completion.
By Elisa Anzolin
MILAN (Reuters) -Italy's fashion house Prada said on Thursday the worst of China's downturn was over, easing pressure on the luxury sector, though it warned the glory days of the last decade were unlikely to return.
Prada, which agreed to buy Versace earlier this year, reported a 9% increase in net revenue for the first nine months of 2025, driven by its Miu Miu clothing and accessory brand.
Sales growth was driven by the Asia Pacific region - the main market for the group - with a 10% increase at constant exchange rates in the nine months. The group flagged "some improvement" in China in the third quarter.
"I think that the worst is over," Prada Chief Executive Andrea Guerra told analysts, referring to a "plateau" in China after a years-long downturn, with sales a bit better than expected during the important Golden week holiday in October.
"But I don't think that we will ever see again, in the near future, what we have seen in the last decade."
From 2017 to 2021 China's luxury market tripled in size and in the post-COVID sales boom Chinese luxury consumption was predicted to have reached 35%-40% of the world's total, according to consultancy Bain.
MIU MIU THE GROWTH DRIVER, PRADA BRAND LAGS
China is key for the $400 billion global luxury sector and accounts for around a third of global luxury sales, but has seen local demand slide amid slower Chinese economic growth.
French luxury groups Hermes, LVMH, L'Oreal and Kering, however, have this month flagged tentative signs of a recovery.
Prada's growth continued to be led by the group's smaller label, Miu Miu, which posted a 29% rise in retail sales in the third quarter. Retail sales at the Prada brand fell 1% in the quarter, improving slightly versus the second quarter.
Retail sales account for 90% of the Prada group's net revenues, which totalled 4.07 billion euros in the January-September period.
CEO SAYS FINAL APPROVALS FOR VERSACE DEAL GETTING CLOSE
Earlier this year Prada clinched a $1.38 billion deal to buy smaller rival Versace from Capri Holdings in a move that unites two of the biggest names in Italian fashion.
Prada's CEO said he expected the last authorization needed for the deal's closing to come in the next fifteen days.
Another major Italian fashion house has recently emerged as a potential takeover target.
The late designer Giorgio Armani instructed his heirs to either sell his company - with priority given to LVMH, L'Oreal and EssilorLuxottica - or list it on the stock exchange.
Asked whether Prada might be interested in managing Armani's fashion business if it were acquired by L'Oreal, Guerra said that it did not seem realistic at this stage.
(Reporting by Elisa Anzolin; Editing by Valentina Za, Adam Jourdan and Elaine Hardcastle)
Net revenue is the total income generated from sales after deducting returns, allowances, and discounts. It reflects the actual revenue a company earns from its core business activities.
The luxury sector refers to the market segment that offers high-end products and services, often characterized by premium pricing, exclusivity, and superior quality. It includes fashion, jewelry, and luxury automobiles.
The Asia Pacific region encompasses countries in East Asia, Southeast Asia, and Oceania. It is a significant market for various industries, including luxury goods, due to its large population and growing middle class.
A takeover occurs when one company acquires control of another company, typically by purchasing a majority of its shares. This can lead to changes in management and business strategy.
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