Prada announced an increase in retail sales for the first quarter, while cautioning that the ongoing conflict in the Middle East has negatively affected its performance, with its subsidiary brand Miu Miu experiencing the most significant impact.

The Italian luxury group reported a 10% year-on-year rise in retail sales at constant exchange rates, reaching €1.245 billion (approximately $1.45 billion). However, excluding contributions from the recently integrated Versace brand, retail sales grew by only 1%.

Patrizio Bertelli, Chairman and Executive Director of Prada, stated, "We are operating in a highly complex environment marked by persistent uncertainty and rapidly evolving geopolitical conditions." This outlook aligns with recent warnings from other major luxury players, including LVMH, Kering, and Hermès, all of which have highlighted the adverse effects of Middle East tensions on their businesses.

According to Prada, the conflict has dampened both local and tourist spending, leading to a 22% decline in sales in the Middle East during the quarter. The Miu Miu brand was particularly affected.

The luxury sector, which had been hoping for a recovery in 2026 following an extended period of weak demand, now faces renewed challenges due to the conflict. Several luxury brands have temporarily closed stores in the region, while a sharp drop in tourist arrivals and reduced travel by high-net-worth Middle Eastern shoppers to Europe have further constrained sales.

Prada also noted that growth in European retail sales slowed noticeably in the first quarter, largely due to weaker tourist spending.

On a positive note, Versace, which Prada acquired last year from U.S.-based Capri Holdings, performed in line with expectations. Andrea Guerra, CEO of Prada, commented, "The integration of Versace is progressing well, with ongoing improvements in organizational structure and business processes laying the groundwork for the brand’s upcoming creative renewal." He added that the brand’s strategy will focus on elevating its product offerings and attracting new customer segments in the coming months.

The group expects the appointment of Peter Mwiriri as Versace’s Creative Director, effective July 1, to bring fresh momentum to the brand, which had previously struggled with declining revenue and persistent losses. In a luxury market dominated by French giants such as LVMH and Kering, Prada’s acquisition of the iconic Italian brand is seen as a strategic move to diversify its portfolio and expand its customer base.