Kering starts the year worse than its competitors

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With an almost stable first quarter, François-Henri Pinault’s group is doing better than expected but not as well as its luxury competitors.

 

 

Consolation lot at Kering. While the luxury group led by François-Henri Pinault had fallen by 7% in the fourth quarter of 2022, it has achieved a revenue increase of +1% on a comparable basis to 5.08 billion euros.

 

This is better than the Bloomberg and Facset consensus forecasts, which were expecting 5.065 billion euros and 5.02 billion euros instead. But it’s not as good as other major luxury players, such as Lvmh (+17%) and Hermès (+23%), which achieved double-digit growth in the first quarter. Kering, particularly Gucci, has benefited less from the Chinese recovery.

 

“Kering’s performance in the first quarter remains mixed, as we had anticipated,” admitted François-Henri Pinault, the group’s CEO. “The gradual improvement in activity throughout the period is encouraging, and we are working to increase the desirability of our brands and develop their visibility in key markets. The numerous initiatives undertaken by our Houses further strengthen their attractiveness and exclusivity and consolidate the foundations for profitable and sustainable growth.”

 

Stabilization for Gucci

 

The group’s flagship brand, Gucci, seems to have stopped its descent into hell. Indeed, it posted a slight growth of 1% in published and comparable data to 2.6 billion euros in the first quarter of 2023. This is a welcome stabilization after a 14% decline in the last quarter of 2022, dragged down by the still-troubled Chinese market.

 

But if its sales in the network of its own stores are up by +1% on a comparable basis in the first quarter of 2023, those in the wholesale channel are still down (-7%).

 

On the other hand, “all key product categories are growing, in particular handbags, the Valigeria collection (travel accessories) and women’s ready-to-wear.”

 

Contrasting performances

 

For its part, Yves Saint Laurent is also recovering, with revenues up +8% to 806 million euros, double that of Q4 2022 (+4%). The momentum is driven by sales from the company’s own network (+14%), the “excellent performance of leather goods and ready-to-wear,” and “the elevation strategy that is bearing fruit.”

 

In contrast, Bottega Veneta is content with flat sales after a +6% increase in the last quarter of 2022. With a contrast between sales in the own network (+5%), and that of the wholesale (-14% on a comparable basis) linked to “the acceleration of the optimization of this sales channel”.

 

The “Other Houses” (Alexander McQueen, Balenciaga, Boucheron, Brioni, DoDo, Pomatello, Queelin) are however still in bad shape, with a decline in sales of 9% to 890 million euros. They are both weighed down by the “rationalization strategy” of wholesale sales, down 32%, and by the situation of the American market. All brand sales are up in the company’s network (+7%). Brioni’s sales were “excellent,” and the performance of the Jewelry Houses “remarkable.”

 

Kering Eyewear: the good student

 

Finally, the Kering Eyewear division still stands out as the best student in the class. After already the radiant year 2022 (with an increase of +27%), including at the end of the year (+30%!), its sales rose by +11% on a comparable basis to 890 million euros, “driven by the dynamism of the portfolio brands.” In mid-March, Kering Eyewear also announced the acquisition of French company UNT, a manufacturer of high-precision components.

 

For Kering, 2023 remains a year of tests to overcome. It will have to succeed in the relaunch of its flagship brand Gucci, whose new designer, Sabato de Sarno, is expected to present his first show in September.

 

Finally, the luxury group is suffering from another pebble in its shoe: it announced in mid-April that the European Commission would be holding inspections at Gucci’s Italian premises. This is part of a preliminary sectoral investigation into possible cartels and anti-competitive business practices conducted in several fashion companies and countries.

 

 

Read also > Kering decelerated in the last quarter of 2022

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With an almost stable first quarter, François-Henri Pinault’s group is doing better than expected but not as well as its luxury competitors.

 

 

Consolation lot at Kering. While the luxury group led by François-Henri Pinault had fallen by 7% in the fourth quarter of 2022, it has achieved a revenue increase of +1% on a comparable basis to 5.08 billion euros.

 

This is better than the Bloomberg and Facset consensus forecasts, which were expecting 5.065 billion euros and 5.02 billion euros instead. But it’s not as good as other major luxury players, such as Lvmh (+17%) and Hermès (+23%), which achieved double-digit growth in the first quarter. Kering, particularly Gucci, has benefited less from the Chinese recovery.

 

“Kering’s performance in the first quarter remains mixed, as we had anticipated,” admitted François-Henri Pinault, the group’s CEO. “The gradual improvement in activity throughout the period is encouraging, and we are working to increase the desirability of our brands and develop their visibility in key markets. The numerous initiatives undertaken by our Houses further strengthen their attractiveness and exclusivity and consolidate the foundations for profitable and sustainable growth.”

 

Stabilization for Gucci

 

The group’s flagship brand, Gucci, seems to have stopped its descent into hell. Indeed, it posted a slight growth of 1% in published and comparable data to 2.6 billion euros in the first quarter of 2023. This is a welcome stabilization after a 14% decline in the last quarter of 2022, dragged down by the still-troubled Chinese market.

 

But if its sales in the network of its own stores are up by +1% on a comparable basis in the first quarter of 2023, those in the wholesale channel are still down (-7%).

 

On the other hand, “all key product categories are growing, in particular handbags, the Valigeria collection (travel accessories) and women’s ready-to-wear.”

 

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With an almost stable first quarter, François-Henri Pinault’s group is doing better than expected but not as well as its luxury competitors.

 

 

Consolation lot at Kering. While the luxury group led by François-Henri Pinault had fallen by 7% in the fourth quarter of 2022, it has achieved a revenue increase of +1% on a comparable basis to 5.08 billion euros.

 

This is better than the Bloomberg and Facset consensus forecasts, which were expecting 5.065 billion euros and 5.02 billion euros instead. But it’s not as good as other major luxury players, such as Lvmh (+17%) and Hermès (+23%), which achieved double-digit growth in the first quarter. Kering, particularly Gucci, has benefited less from the Chinese recovery.

 

“Kering’s performance in the first quarter remains mixed, as we had anticipated,” admitted François-Henri Pinault, the group’s CEO. “The gradual improvement in activity throughout the period is encouraging, and we are working to increase the desirability of our brands and develop their visibility in key markets. The numerous initiatives undertaken by our Houses further strengthen their attractiveness and exclusivity and consolidate the foundations for profitable and sustainable growth.”

 

Stabilization for Gucci

 

The group’s flagship brand, Gucci, seems to have stopped its descent into hell. Indeed, it posted a slight growth of 1% in published and comparable data to 2.6 billion euros in the first quarter of 2023. This is a welcome stabilization after a 14% decline in the last quarter of 2022, dragged down by the still-troubled Chinese market.

 

But if its sales in the network of its own stores are up by +1% on a comparable basis in the first quarter of 2023, those in the wholesale channel are still down (-7%).

 

On the other hand, “all key product categories are growing, in particular handbags, the Valigeria collection (travel accessories) and women’s ready-to-wear.”

 

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Sophie Michentef
Sophie Michentef has worked for more than 30 years in the professional press. For fifteen years, she managed the French and international editorial staff of the Journal du Textile. She now puts her press, textile, fashion, and luxury expertise at the service of newspapers, professional organizations, and companies.

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