Kering moves slowly and isn’t keeping up with competitors. Gucci’s performance reflects the analysts’ caution, while Saint Laurent does better than Bottega Veneta. Kering generated a revenue of 5.08 billion euro in the 1st quarter of 2023: +2% at current rates and +1% at comparable rates. Much below the 23% increase of Hermès and the +18% of LVMH. “As forecasted, Kering’s results for the first quarter were constant”, observes the CEO of the French conglomerate François-Henri Pinault. The route of the multinational moves at “two speeds” and needs a change of pace to turn the current fiscal year around.
Kering’s quarter moves at “two speeds
Kering’s modest revenue increase came after a 2% decrease recorded during the last quarter of 2022 (-7% on comparable basis). Revenue reached 5.08 billion, slightly higher than the forecast by analysts of 5.04 billion. Gucci’s sales increased 1% compared to the 14$ decrease of the previous quarter. The luxury brand benefitted from the recovery of China, but not the direct competition with other brands, as sales also moved backwards in the USA.
“We cannot expect to gain large shares in a few weeks”, said CFO, Jean-Marc Duplaix (source Reuters). The manager highlighted how the group is focusing on creating a more exclusive positioning for Gucci, and in fact has opened stores for just the “super-rich” (lower item price 40,000 euro). Time is needed before the De Sarno effect (the stylist that substituted Michele as creative director) will impact performances. “The first runway show on which the outcomes will be seen will be in September, when the collections being sold in 2024 will be shown”, confirmed Duplaix.
Bottega Veneta slows
Bottega Veneta’s sales remained unvaried, compared to the +6% of the previous quarter. Saint Laurent’s revenue increased 8%, against the +4% scored in the October-December 2022 period. The results of the other brands owned by Kering confirm the depressed trend: -9% after the -4% of the previous quarter when the advertisement scandal took down Balenciaga. “Balenciaga’s trend and that of Alexander McQueen are now more positive. Brioni’s sales were, on the other hand, excellent and the performance of the jewelry unit was extraordinary”, he said. But then: what happened? Easy (more or less): wholesale revenue from Kering’s fashion business lost 32% due to the situation in the USA and the brands’ strategies to rationalize wholesale distribution (source WWD).
Read also:
