Par
Bloomberg
Translated by
Anne SCHILLING
Published on
Dec 20 2023
Prada has agreed to buy the building housing its flagship store on New York’s iconic Fifth Avenue – one of the world’s greatest shopping streets – for $425 million, or €387 million, the request of American consumers resisting inflation and high borrowing costs.
Prada 724 Cinquième Avenue New York – Europapress.es
The Hong Kong-listed Italian fashion company is leasing from its store in the 12-story building at 724 Fifth Avenue, according to the stock exchange filing made Wednesday. She said the property’s location offered high strategic value following an influx of residential, hotel and commercial investment in the area. The group will continue to use the space for its store, offices and storage.
US retail sales are defying the global slowdown, with the latest data showing an unexpected recovery in November that helped reach the highest level since April 2022. While analysts expect some moderation in 2024 due to declining household savings and deteriorating credit conditions, spending in the country still appears stable compared to China, where a housing market crisis is forcing consumers to tighten their belt. Chinese shoppers are now increasingly prioritizing experiential spending, such as food and drink, over purchasing luxury handbags.
Prada’s sales slowed in the third quarter, with net revenue falling short of analyst estimates at 1.11 billion euros. The Prada brand, which represents more than 80% of sales, saw its growth slow to 5% during the quarter, compared to 15% during the previous quarter. The conflict in the Middle East and its global repercussions have had an impact on business, Prada Chairman and CEO Andrea Guerra told analysts during an earnings conference call in October.
However, some luxury brands have shown resilience amid a global slowdown in demand for luxury goods. Hermès sales surged in the third quarter as wealthy buyers in the United States and Europe flocked to the French house’s iconic and expensive Birkin and Kelly bags. The American performance was notably supported by the brand’s boutique which opened its doors a year ago on Madison Avenue, said Éric du Halgouët, financial director of the Hermès group, during a conference call in October.
2023-12-31 04:10:38
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