Business

Prada shares fall sharply after China luxury warning

Prada fashion show Image copyright AP
Image caption Shares in Prada are listed in Hong Kong, in a sign of how important the Chinese market is to the firm

Shares in luxury retailer Prada plunged more than 8% after the firm warned that sluggish sales in Europe and a maturing China luxury market could hurt profits.

Shares in the Italian firm, known primarily for its handbags, fell the most in two years on the warning.

On Wednesday, Prada reported profits of 627.8 million euros ($864m; £519m) for the year ending on 31 January.

It said same-store sales would rise at a "low single-digit" pace in 2014.

The company partly blamed currency fluctuations for eating into profits.

"The continuing strength of the Euro does not help with exports," said Prada chief executive Patrizio Bertelli in a statement.

Prada, which was founded in 1913, also owns Miu Miu and Church's Shoes brands. It raised $2.1bn (£1.3bn) via a public share sale on Hong Kong's stock exchange in 2011.

It is just one of several luxury retailers that have been hit by softening demand in Europe and, more importantly, a slowdown in former sales engine, China.

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