Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Gucci joins luxury goods rebound, boosting Kering sales

Stock MarketsApr 20, 2021 18:30
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: Gucci products are displayed in the window of a store on Old Bond Street in London

By Silvia Aloisi

PARIS (Reuters) - Revenue at Kering (PA:PRTP)'s Gucci fashion label rebounded strongly in the first quarter, adding to signs of a comeback for the broader luxury goods industry as COVID-19 restrictions ease in major markets like China and the United States.

Sales of high-end fashion and handbags are soaring again as vaccinations progress and stores re-open, although new coronavirus lockdowns in much of Europe are holding back momentum there, while international travel is still on ice.

The Kering conglomerate's overall sales rose and Gucci, which accounts for 60% of Kering's revenues and 80% of its profits, posted comparable revenues up by 24.6%, ahead of analysts' consensus forecast for 19% growth.

That is likely to soothe investor concerns that the brand is losing steam after five years of stellar growth, after it lagged some major rivals in 2020.

But fashion labels at Kering's arch-rival LVMH (PA:LVMH)'s, which include Louis Vuitton, performed even more strongly in the first quarter, and Bernstein analyst Luca Solca said this could potentially weigh on Kering's shares.

Gucci is hoping to capitalise on its centenary year to attract fans with events and new collections, including one presented online last week where Gucci designs were crossed with silhouettes and logos by Balenciaga, another Kering brand.

The show has had 205 millions views online, Kering Finance Chief Jean-Marc Duplaix told reporters, adding it confirmed renewed momentum at the brand.

Harry Barnick, a senior analyst at research firm Third Bridge, said the catwalk show could help create buzz with some key customers.

"This is likely to be particularly successful in China," Barnick said.

WESTERN EUROPE LAGS

Duplaix said Kering planned to invest to help boost momentum at Gucci this year, although the group would remain disciplined on costs and margins.

For group as a whole, which also includes Saint Laurent, Kering posted sales up by 83% in the Asia Pacific region and by 46% in the United States in the three months to March from a year earlier.

In Western Europe, however, sales fell 34%. Duplaix said the hit was most marked in some countries which had spent much of the quarter under a strict lockdown, such as the United Kingdom.

More than half of Kering's European stores were closed in the first quarter, and that number increased at the beginning of April due to fresh lockdowns in France and Italy, Duplaix added.

Overall revenues reached 3.89 billion euros ($4.69 billion)in the quarter, up 25.8% when stripping out exchange rate swings and acquisitions. They were up 5.5% like-for-like compared with pre-pandemic levels in the first quarter of 2019.

Some of the Paris-based conglomerate's other labels also performed well, including Bottega Veneta, which Kering has been trying to revive under a new designer after several years of faltering sales.

E-commerce was also up sharply - with online sales now accounting for 14% of the total - as luxury shoppers become more comfortable buying pricey goods remotely.

($1 = 0.8303 euros)

Gucci joins luxury goods rebound, boosting Kering sales
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email