January 7, 2013

Prada, a successful business in an austere economy

Prada

EUR 42 million claims Prada Milan to have forcefully paid Italian fiscal authorities, taxes claimed by the latter for revenue brought by the Netherlands company holding, holding owning 80% of the fashion house. Property rights and fluxes of funds seem equally intricate, but for Chief Financial Officer Donatello Galli, just as fair and honestly made.

After a year having reported 50% profit growths, up to EUR 408.6 million, and 35% sales hikes, totalling EUR 2.34 billion, the fashion house’s management alleges that European governments are determined to raise as much taxes as the interpretation of fiscal regulations would allow them.

If Prada has already paid the due sums – in order to avoid staggering penalties – and aims at a legal action for claiming back the money, the phenomenon in itself is now unknown to the fashion world.

Apparently, the financial and economic crisis did nothing to affect whopping sales and profit gains made by luxury fashion houses, nor did it hinge on their creativity as far as their search for new options of efficient accounts management is concerned. Yet, the constraints governmental authorities are under as well as their desire to consolidate their budgets have reached unprecedented magnitudes.

Italy boasts a tradition for being both a designers’ paradise and a deficits inferno. We sure do hope the artistic creativity of the first will remain untamed.

Prada

 

Photo sources:  androidpolice.com, vogue.com, trendland.com