Gucci and Saint Laurent surge higher for Kering but Bottega Veneta struggles
Kering opened its Q3 sales release with the words “sharp acceleration in organic growth”. But that fairly dry summing up was something of an understatement as the global luxury giant offered up a 17% comparable sales spurt at star brand Gucci and an almost 34% surge at Yves Saint Laurent.
Gucci is key to the group as it accounts for more than 60% of the firm’s operating profit and this was the brand’s first double-digit growth since 2012.
Yet it wasn’t a complete triumph for the French conglomerate as Bottega Veneta continued to struggle, with a disappointing 10.9% drop in comp sales.
So let’s look at the numbers in detail. Kering’s overall sales reached €3.185bn, rising 10% in total or 10.5% on an organic basis (which means with year-to-year variations and exchange rate fluctuations factored-out).
In the all-important luxury division, comparable sales rose 11.3% and total sales rose 12% to €2.115bn on the back of that surge at Gucci and the 33.9% sales hike at Saint Laurent.
Sales in directly operated stores enjoyed double-digit growth across all geographic regions excluding Japan, with strong growth of 24% in Asia-Pacific, a very steady 17% increase in revenue in North America and an extremely good performance in Western Europe, which grew by 12%.
At Gucci, sales were up sharply across all product categories and most regions, with Japan the only market where turnover was lacklustre for Gucci and the luxury sector as a whole.
Gucci comp sales in directly operated stores rose by a very strong 19% with both men's and women's shoes and ready-to-Wear proving popular. In leathergoods, the brand’s the GG Marmont, Sylvie and Dionysus bags proved to be top sellers.
The company said Alessandro Michele’s creative vision is continuing to attract an increasing number of new customers and the brand is also winning new converts via its digital strategy. In Q3 that included partnerships with artists (for the GucciGhost product line and the #24HourAce initiative), plus capsule collections sold exclusively online (Gucci Garden). Sales from Gucci's e-commerce website increased by more than 50% during the quarter.
At Saint Laurent, the revenues surge was achieved across all geographic regions and product categories, including men's and women's ready-to-Wear as well as shoes and leathergoods.
New collections including handbag models such as the Sunset Monogramme sold well, as did the brand’s “permanent collections”. Strength was seen both in-store and online with e-commerce sales almost doubling.
But what about Bottega Veneta? Formerly Kering’s second biggest brand, it has struggled in recent periods, especially in comparison to the powerful growth seen at its stablemates.
Keying said Q3 sales were once again hurt by slower tourism, particularly in the mature markets of Western Europe and Japan. Revenue fell 10.9% on a comparable basis and 9.3% as reported with sales in directly operated stores lower in the quarter. However, they delivered a slight improvement compared to Q2 thanks to resilient sales to local customers in Europe and growth across all main markets in Asia-Pacific, with the exception of Hong Kong.
The brand is pushing ahead with the implementation of an action plan, which involves renewing the leathergoods offer and improving the in-store visibility of all new products.
Under this initiative, Bottega Veneta has introduced new models based on the brand’s intrecciato leatherwork technique. Bottega has also continued to develop its footwear category, which is proving such a powerful draw at other Kering labels. Footwear “confirmed its momentum” for Bottega in the third quarter.
The company said revenue growth for its other brands was in line with second-quarter trends.”
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