In the first six months of 2019, Kering managed to counterbalance Gucci slowdown, as the group’s blockbuster brand went up less than expected; China and leather goods have been driving business expansion. Meanwhile, Armani closed 2018 financial statements by reaching 2.1 billion euros, in terms of revenues, and 152 million euros, in terms of profits.
In the second quarter of the year, the French giant, led by François-Henri Pinault, augmented its revenues by 15.9% (they reached 3.85 billion euros), pretty much in line with the analysts’ forecast, as reported by Reuters. Looking farther at the period from January to June, consolidated revenues amounted to 7.63 billion euros, therefore increasing by 18.8%, compared to 2018 first six months. The Ebitda grew by 19.6%, yet net profits dropped by 75%, down to 580 million euros, owing, among other reasons, to the effects of the agreement between Kering and Italy’s Inland Revenue. The group expects incomes to rise by 4% to 6% throughout the year.
In the second quarter, at fixed rates of exchange, Gucci went up “just” by 12.7%, less compared to +20% in the first three months of the year: at the end of the six-month-period, revenues amounted to 3.85 billion euros (+16.3%). Kering group’s flagship brand blamed such slowdown on the US market, as previously announced by CEO Marco Bizzarri even prior to data publication.
The other fashion brands
The brand that achieved the best performance, in the period under consideration, has been Saint Laurent: in fact, in the second quarter, the brand’s revenues increased by 15.8%, after rising by 17.5% in the first one, therefore growing, in the six-month-period, by 16.6%. Likewise, Bottega Veneta have been going well: after decreasing by 8.9% in the first quarter, they managed to grow by 0.8% in the second one, therefore limiting their downturn, over the first six months (-3.8% overall).
Leather goods and footwear
As a whole, “leather goods and jewellery have been mostly driving business expansion”. Kering group itself confirmed that, while emphasizing that also footwear sales have been “enjoying a considerable boost, compared to the year before, despite very high comparison standards and fierce competition”. Leather goods have been driving Saint Laurent’s positive business trend especially. “We succeeded in achieving such accomplishment thanks to the good work of our creative team, trained on purpose”, pointed out the group in a press release. In contrast, Gucci footwear sales have been slowing down. “Growth in footwear sales and prêt-à-porter turned out to be very solid – remarked Kering –, but has stabilized as expected: in fact, both segments were the ones which first took advantage of the brand’s style turning point, in 2016”.
Record figures in China
In China, Kering group’s sales increased by 35.3%, year after year. Chinese buyers have been coming back to domestic market, and their shopping in China has been driving such noteworthy booming. Kering expect revenues to rise by 18% to 20%, at fixed rates of exchange, throughout the year.
Armani’s business in 2018
“I have trust that what we have been doing so far will reinforce the group’s leadership role”. By saying so, as reported by MFF, Giorgio Armani commented on the financial statements made public by his holding. In 2018, net revenues amounted to 2.1 billion euros (-10%), while profits reached 152 million euros, and capital assets amounted to 1.3 billion euros. According to press heads up, the group in charge of Giorgio Armani, Emporio Armani and A X Armani Exchange brands is enjoying a positive trend with regard to spring/summer 2019 sales. Looking ahead at the following stages regarding the reorganization plan underway, “thanks to our remarkable capital assets – added Armani – we will be able to deal with growing investments in our brands, while acting on our own, in complete autonomy”. The group also modified their management: Giuseppe Marsocci took over as vice-director with responsibility for commercial issues, while Daniele Ballestrazzi will oversee the finance and operations department.
Picture taken from Gucci