Focus on Kering quarterly performance: Bottega Veneta fly high, Gucci slow down

Il trimestre di Kering

Kering may well rejoice in the accomplishments achieved by Saint Laurent and, most of all, by Bottega Veneta. Likewise, the group praises Balenciaga and Alexander McQueen rewarding performance. They can therefore offset Gucci “slowdown”, that is, not such an outstanding boost. In addition, they could cope with Hong Kong problems. This is briefly the last balance sheet of the French luxury multinational corporation: it is about 2019 third quarter and the first nine months of the year.

Kering

As reported by Reuters, in Hong Kong Kering sales dropped by 35% throughout the third quarter of the year. Yet, despite such downturn, the group’s overall revenues successfully reached 3.885 billion euros, therefore increasing by 14.2% at current rates of exchange and by 11.6% at fixed rates of exchange. Incomes have been slightly slowing down then, in line with expectations: in fact, in the previous quarter revenues had been growing, at fixed rates of exchange, by 13.2%. In the first nine months of 2019 Kering’s global turnover amounted to 11.523 billion euros (that is, +17.2% at current rates of exchange and +14% at fixed rates of exchange). Here are the brands’ performances at fixed rates of exchange: Gucci +14.3%, Saint Laurent +14.6%, Bottega Veneta -0.4%. Other brands, +18.9%.

Bottega Veneta

The brand was supposed to enjoy a business revamp. They undoubtedly reached the goal in the financial quarter. Following a -8.9% trend in the first quarter, Bottega Veneta’s revenues increased by 0.8% in the second one to fly high from July to September: +6.9% at fixed rates of exchange, even +9.8% at current rates of exchange. Kering consider this performance “highly encouraging”. New collections, created by fashion designer Daniel Lee, mostly drove such noteworthy success. For the records, not only customers, but also experts did praise the English designer. In fact, just 8 months after his maiden fashion show for the Italian brand, Lee got four nominations at the Fashion Awards 2019.

Gucci

The brand keeps growing while following a normalization trend, as predicted by chief executive officer Marco Bizzarri. In the third quarter of the year, sales increase reached +13.3%, at current rates of exchange, and +10.7% at fixed rates of exchange: overall revenues amounted to 2.375 billion euros. “Although the growth rate has gone beyond analysts’ estimates (around +2%)”, pointed out Robert Williams, from Bloomberg, “it has considerably dropped compared to the expanding trend of the brand, +30% or even more, in the last two years”. Gucci, which drives 62.9% of Kering’s global earnings, mostly augmented its sales in the Asia-Pacific area (+18%), therefore avoiding Hong Kong downturn.

Saint Laurent

The brand, led by Anthony Vaccarello, successfully matched Gucci’s performance. Sales have been increasing by 13.3% at current rates of exchange and by 10.8% at fixed rates of exchange. North America and Japan, alongside the online channel, drove such positive outcome. Unlike Gucci, the brand was affected by protests and riots currently underway in the British ex-dominion.

In the pictures, taken from the official websites, a bag presented at Gucci’s latest collection, left, and, on the right, a screenshot from Bottega Veneta’s latest advertising campaign

Read also:

Kering’s welfare: parental leave extended to all parents
Bizzarri: “Leather industry and tanneries drive Gucci’s higher sustainability”
Goldman Sachs predict Gucci further growth, though mega-boom is over

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