Prada Up in the First Quarter: Italian Luxury Resilient in the Face of US Pressure

The Italian luxury group Prada announced a 12.5% increase in net revenue in the first quarter, at constant exchange rates, slightly exceeding analysts' expectations. This performance was mainly due to a 60% surge in retail sales of its secondary brand, Miu Miu. Prada's net revenues reached €1.34 billion, the group said on Wednesday, while the Visible Alpha consensus was €1.33 billion.

In an international context marked by geopolitical instability and unilateral decisions by the US administration, the Italian luxury textile sector is trying to maintain its balance. The recent first-quarter 2025 financial results posted by the major Italian fashion houses show clear resilience, although the environment remains fragile.

On April 24, Zegna announced sales of €458.8 million for the first quarter of 2025, a slight decline, while Brunello Cucinelli grew by 10.5%. Despite these solid performances, Italian luxury textiles remain under threat from US tariff increases and an uncertain geopolitical environment.

The Ermenegildo Zegna group announced sales of €458.8 million on April 24, marking a slight decline of 1%. However, its flagship brands—Zegna and Tom Ford Fashion—continue to grow, with a combined increase of 4%. Sales in the US market grew by 9%, driven by strong retail sales. This is an encouraging sign, despite growing trade tensions between the US and the European Union.

Ermenegildo Zegna, the group's chairman and CEO, welcomed the results while highlighting the challenges facing the Italian textile industry. Italy, Europe's third-largest exporter to the US, could see its fashion and luxury exports, currently estimated at €12 billion, fall by €600 million to €1.2 billion, according to the Unimpresa research center. This is due to the tariff increases imposed by the new US administration.

Despite this context, Brunello Cucinelli remains cautiously optimistic. The cashmere company saw its turnover climb 10.5% in the first quarter, reaching €341.5 million. The founder described this period as a “special moment for the world,” calling on his employees to remain focused and perseverant. The annual target remains ambitious: 10% growth.

Regarding US customs duties, Cucinelli has indicated that it will maintain its prices in the first half of 2025, while planning price adjustments on the US market from July onwards. He points out that, given the high-end profile of its customer base, the impact on sales should remain limited.

But the central question remains: will this ultra-wealthy clientele, which is relatively insensitive to price variations, be enough to protect "Made in Italy "from US protectionist turbulence? On April 17, Italian Prime Minister Giorgia Meloni traveled to Washington to discuss trade issues and the concerns of major Italian luxury groups. However, no concrete agreement emerged from the meeting.

While fast fashion companies are likely to be the first to be affected, luxury goods could also suffer structural effects in the long term. A possible relocation of production to the US would pose major challenges in a country where skilled industrial labor is scarce. In Italy, the impact would have a knock-on effect on the entire craft ecosystem, particularly subcontractors, who are often dependent on orders from medium-sized brands that are also subject to price increases.

Faced with this threat, French giants such as LVMH and Kering are stepping up their vertical integration strategy by absorbing production chains. This is a trend that Italian fashion houses are watching with interest, although with less determination so far.