Saint Laurent’s direct retail performance strong in first quarter, except for Europe

In 2017, Saint Laurent sales were worth €1.502 billion, up 23 percent on an annual basis. In the first quarter 2018, the Kering group's second-ranked label, behind the Gucci leviathan, generated a revenue of €408 million, equivalent to a 19.6 percent rise at constant exchange rates ( up 12 percent at current rates). An impressive sales figure, but still a slow-down in the luxury label's growth trend.


Saint Laurent is planning about twenty monobrand store openings in 2018 - Saint Laurent

Propelled by Anthony Vaccarello’s creative zest, Saint Laurent had accustomed observers to 20 percent-plus rates of growth. Instead, the salient fact about the label’s first quarter performance was that it posted a 1 percent downturn in retail sales in western Europe. At the presentation of the Kering group’s results to financial analysts, group CFO Jean-Marc Duplaix put this slow-down of Saint Laurent’s performance in context.

“We come from several quarters of strong growth in Europe. In the last three years, we posted growth rates between 29 percent and 46 percent. To explain the current performance, we must take into account this strong positive trend, combined with a decrease in tourist visits across Europe. Our local clientèle is always there, a solid and encouraging presence. We shouldn’t focus on Europe alone. Chinese customers (who account for nearly one third of the world’s luxury goods market) have shifted their purchases back towards other regions, especially Asia-Pacific,” said Jean-Marc Duplaix.

Indeed, Saint Laurent’s retail revenue, which accounted for 63% of the label’s revenue in the first quarter, rose 27 percent in North America, 23 percent in Japan, a country to which Chinese consumers seem to be flocking once again, 24 percent in Asia-Pacific, with a notable leap in Hong Kong, and 17 percent in the rest of the world. According to Jean-Marc Duplaix, the label’s global growth “strikes a nice balance between comparable sales increases and new store openings.”

In the latest quarter, Saint Laurent opened six new monobrand stores, in Asia and North America, reaching a total of 190 directly operated stores worldwide. Altogether, the label is planning about twenty new store openings in 2018. In Paris, no date has yet been set for the opening of the Saint Laurent store in rue Saint-Honoré, at premises formerly occupied by Colette.

“[Saint Laurent CEO] Francesca Bellettini was very clear and transparent about the fact that the growth of Saint Laurent would be also driven by a broadening of the retail network, considering there are regions where we have not yet reached the level we would wish for the brand. And you can rely on Francesca and her team for keeping track of what is happening in the various regions and for taking the appropriate measures to foster comparable sales growth,” said Duplaix.

Saint Laurent’s international visibility thrives on a strong promotional presence: the label notably enlisted Kaia Gerber for the Autumn/Winter, and will stage a show in New York next June. Saint Laurent is also expanding its e-tail footprint, having launched the latest version of its website less than six months ago. The new site allows the label to reach about fifty countries, and goes hand in hand with its presence on Toplife, the Farfetch-JD.com platform in China, which should speed up Saint Laurent’s expansion in the world’s most populous country.

Jean-Marc Duplaix was optimistic about sales getting back on a growth track in western Europe, and added that “our performance in the USA in 2017 was weak. Francesca decided to turn it around and took a series of structural measures, and we are now seeing the benefits of some of the harsh decisions we took, which put extra pressure on the organisation. The situation is encouraging for Europe. I’m sure we can improve our comparable sales there.” Indeed, the situation in Europe isn’t quite so bleak. It remains the label’s leading regional market, generating 36 percent of revenue, compared to 29 percent generated by Asia-Pacific, 21 percent by North America and 8 percent by Japan. And Saint Laurent’s wholesale business posted a robust 32 percent rise, driven by western Europe. Also, the label expressed satisfaction for the strong performance of the Niki handbag; leather goods remained the label’s leading segment, accounting for 58 percent of revenue last year, ahead of ready-to-wear (19 percent) and footwear (14 percent).

Translated by Nicola Mira

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