Demand for luxury goods defies downturn as label's profits treble

If the world is tightening its belt, then it's made of luxurious Italian leather. Profits at fashion house Prada have trebled so far this year, boosted by sales of luxury items in Asian and American markets.

Rising unemployment and a crisis in the eurozone, not least in the label's home of Italy, have not affected the world's appetite for staggeringly expensive handbags and leather boots and shoes.

All four of the Prada Group's labels have contributed to the rise: Prada, Miu Miu, traditional British shoemaker Church's and designer moccasin makers Car Shoe.

Church's were among a number of high-profile acquisitions in the 1990s which left the company €1bn in debt. But Prada's attempt to increase revenue by expanding its network of shops has paid dividends.

It marks a significant step in the extraordinary journey of the company since it was taken over in 1978 by Miuccia Prada, now 61, granddaughter of Mario Prada, who opened the first Prada store in 1913, a leather goods shop in Milan.

Miuccia Prada's husband, Patrizio Bertelli, an Italian who had begun his own leather goods business at the age of 17, joined the company shortly after meeting Ms Prada in the late 1970s, and is now its chief executive. He has been at the heart of the company's drive to become a big player in the global fashion world.

Prada hopes to list on the stock market next year with Hong Kong rumoured to be the most likely centre, close to the Asian consumers which are driving its recent surge in profits.

China, in particular, has been the centre of Prada's commercial renaissance. There are estimated to be more than 130 US dollar billionaires in China at the latest count and hundreds of thousands of Chinese millionaires.

"The data confirms that the retail network expansion is a winning strategy. These excellent results let us confidently look at the oncoming group's development," said Mr Bertelli in a statement.

Sales were said by the firm to have risen by 31 per cent to €1.38bn in the last nine-month period. Europe and the United States have contributed to growth, but in the Asian market sales have risen 51 per cent, the most significant element in the firm's success.

Prada's status as a major global brand was enhanced by the 2006 movie The Devil Wears Prada, which was based on the notorious Vogue editor Anna Wintour and celebrated the fashion industry's love of corporate excess.

English actress Carey Mulligan was also wearing a strapless jet-black Prada gown when she lost out to Sandra Bullock at this year's Academy Awards in Los Angeles.