How much will the Coronavirus impact luxury companies? Kering’s revenue in the first quarter lost between 13% and 14%, equal to -15% in comparison to the first quarter of 2019. The group sees a light (only) in China, where there are “encouraging signs”.
Kering’s revenue in the first quarter
After Burberry, French groups are also showing, in numbers, the effects on activities. At least during the first quarter. Kering, reads a note, pushes beyond the month of March: the group expects 2nd quarter’s revenue to be strongly impacted by the pandemic. The hit will be felt on both local and tourists’ consumption, as well as on operating margins, also forecasted down for the semester. Kering says it is unable to quantify the loss “due to the situation’s quickly changing dynamic”.
Countermeasures
What is Kering doing to mitigate the effects of the pandemic? The initial action plan implemented has the goal of containing costs and preserving the working capital. The group though, is evaluating further steps to protect its operating margin and market position of its brands. Kering clarifies: “The epidemic doesn’t put in question the structural base of the luxury industry”.
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