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Tag: Kering

  • Gucci unveils Gucci Equilibrium

    Gucci unveils Gucci Equilibrium

    Gucci has its finger right on the pulse of the fashion industry, as its latest initiative, Gucci Equilibrium, solidifies its position as a sustainable, responsible as well as highly-desirable luxury fashion house.

    Today, on World Environment Day, the Italian fashion house launches its new online destination at Equilibrium.gucci.com, “designed to connect people, planet, and purpose,” as ideas surrounding what it means to be luxury continue to evolve.

    The initiative is part of Gucci’s mission to balance the creation of luxury fashion with a radical sustainability agenda, as its parent company Kering continues strives to offer the best products, made in the best way out of the best materials while taking the best care of the planet and its inhabitants.

    “Gucci is not a company where you must leave your values at the door, but one where they are enhanced, challenged and amplified,” said Marco Bizzarri, Gucci President and CEO in a statement. “Gucci Equilibrium is about us spreading that energy and that positive intent to everyone who loves our brand.”

    The new platform shares curated content which showcases the stories, ideas and the science behind Gucci’s environment and social impact change, all while highlighting the luxury fashion house’s perspective on some of the key issues within the industry.

    The launch is part of Gucci’s wider 10-year plan to embed a comprehensive sustainability strategy into its brand, one which will be governed by a Culture of Purpose.

    In turn, this Culture of Purpose dictates Gucci’s operations on a daily basis, which are held in place by three pillars that include the environment, people and new models of sustainable innovation. Under the first pillar, Environment Gucci highlights its commitment to reduce its environmental impacts by setting targets to develop a new standard in luxury.

    For example, on the new platform readers can learn more about Gucci’s aim to guarantee the traceability of 100 percent of its raw materials by 2025 – a tall order for any brand.

    People, the second pillar, sees Gucci recognizing the value of its employees and working to enhance the lives of the individuals who make its products by supporting local communities. For example, Gucci is committed to fighting gender inequality through its Chimes for Change for Girls’ and Women’s Empowerment campaign.

    Gucci Equilibrium also shines a light on I was a Sari, a social enterprise which works with women from marginalised communities in Mumbai, teaching them new skills to bring in recurring income.

    At the same time, Gucci also underlines its use of technical innovation to improve efficiency in its production and logistics under its third pillar, New Models. For example, its newly opened Gucci ArtLab, offers a start-up environment for innovation, craftsmanship and experimentation.

    “These are critical times when we can all play our part in helping to deliver on the UN Global Goals and the Paris Climate Agreement,” added Bizzarri. “The only way to do that is by bringing people together, sharing ideas, innovation, and experiences. This is the objective we have set for Gucci Equilibrium.”

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  • Gucci succesfull for Kering sales

    Gucci succesfull for Kering sales

    Kering sales rocketed 36.5 per cent in the first quarter of this year, reaching €3.108 billion (US$3.8 billion), led by Gucci’s staggering 48.7 per cent improvement.

    “Kering maintained its outstanding sales momentum in the first quarter,” said Kering chairman and CEO Francois-Henri Pinault. “Under its new luxury pure-player profile, the group clearly outperformed a market that remains well oriented,” he said.

    After including discontinued operations – Puma, Volcom and Stella McCartney, which Kering has divested its interests in – sales growth was still up 27.1 per cent.

    Gucci’s “spectacular growth” included a 49.4 per cent leap in Asia Pacific and 64.4 per cent in North America. Gucci sales for the quarter totalled €1.866 billion.

    “Gucci, Saint Laurent and Balenciaga set a high mark within a group that delivered sharp growth as a whole,” said Pinault. “In the balance of the year, we face a high base of comparison and a tough currency environment, but we are confident in the ability of our Houses to continue doing better than their peers, leveraging their innovativeness and creative audacity.”

    Yves Saint Laurent sales rose 19.6 per cent (including 23.6 per cent in Asia Pacific) while the combined contribution of Alexander McQueen, jewellery and watches recorded a 37.9 per cent improvement. Even troubled Bottega Veneta improved by 0.7 per cent (including a 5.8 per cent lift in Asia Pacific), the first visible impact of a restructuring plan. New lines were “well received,” according to Kering, and ready-to-wear fared well, but wholesale slipped “slightly” in the quarter.

    “The House is continuing to optimise its store network and strengthen its visibility through a communications strategy designed largely for digital media.”

    Balenciaga led a 37.9 per cent improvement from ‘Other Houses’, Kering’s smaller luxury brands.

    “Watches and jewellery performed very well this quarter. The strengthened positioning of Boucheron, Pomellato and Qeelin are paying off, thanks to new collections, extended iconic lines and investments in communications and store networks. Watches also turned in a good performance this quarter,” said Kering.

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  • Stella McCartney buys Kering’s 50% stake in her fashion label

    Stella McCartney buys Kering’s 50% stake in her fashion label

    Kering is selling its 50 per cent stake in fashion label Stella McCartney back to the namesake designer after a 17-year partnership.

    The news follows a report last month revealing that a formal transition process was already in motion with an announcement imminent.

    “It is the right moment to acquire full control of the company bearing my name,” says McCartney.

    “This opportunity represents a crucial patrimonial decision for me. I am extremely grateful to Francois-Henri Pinault and his family and everyone at the Kering group for everything we have built together in the past 17 years. I look forward to the next chapter of my life and what this brand and our team can achieve in the future.”

    Kering chairman/chief executive Pinault says it is the right time for McCartney to move to the next stage. “Kering is a luxury group that empowers creative minds and helps disruptive ideas become reality. I am extremely proud of what Kering and Stella McCartney have accomplished together.”

    McCartney had the option, expiring on Saturday, to buy back Kering’s shares in the label, according to the terms of their JV. Kering and Stella McCartney have previously acknowledged separation talks on more than one occasion over the course of their partnership.

    McCartney’s father, musician Paul McCartney, is said to have played a role in helping to finance the buyback, but this cannot be independently confirmed. A spokesperson for McCartney previously said that her father has never been involved with the business.

    The disposal of Stella McCartney comes at a time when Kering is streamlining its portfolio. It announced in January it would spin off German sportswear brand Puma to its own shareholders.

    The split comes after Kering announced its most profitable year on record, with group net profits soaring 120 per cent last year driven by “spectacular” growth at Gucci and Yves Saint Laurent as well as a strong performance by Balenciaga, the group’s fastest-growing brand in the fourth quarter.

    The conglomerate posted sales of €15.5 billion (about US$19.2 billion), up 27.2 per cent year on year. Revenues topped €10 billion for the first time, with Gucci crossing the €6 billion mark in sales.

    McCartney first made her mark at Richemont-owned fashion label Chloe, before launching her eponymous brand in partnership with Gucci Group (once a subsidiary of what is now Kering).

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  • Stella McCartney-Kering ready to separate

    Stella McCartney-Kering ready to separate

    After a 17-year partnership, French luxury group Kering is selling its 50 percent share of Stella McCartney back to the namesake designer. The public announcement, originally slated for early January 2018, is imminent, according to a source with first-hand knowledge of the discussions.

    According to the source, the Stella McCartney HR team is preparing a booklet outlining the details of the separation to answer outstanding questions and ease employee concerns. However, both parties issued a joint statement saying nothing has been confirmed.

    “Kering and Ms Stella McCartney have been operating and growing the Stella McCartney brand since 2001 as a 50/50 joint venture. As already stated, as it is customary between stakeholders, there are regular discussions about the future of the partnership,” Kering and Stella McCartney said. “Any significant change to the current relationship would be made public at the appropriate time. Any piece of information circulating to this respect can only be considered as speculation.”

    To be sure, unravelling the partnership will be a time consuming, expensive process.

    According the source, Kering’s brands will be forbidden from hiring Stella McCartney employees during the transition process, which could take as long as two years.London-based retail strategy consulting firm Javelin, part of global advisory firm Accenture, is working with Stella McCartney to reorganise during the transition period, creating a blueprint for the newly independent Stella McCartney business.

    While Kering and Stella McCartney have acknowledged that there have been separation talks on more than one occasion over their 17-year partnership, the exact reasons for the break, and why it’s happening now, are not yet known. The reported split does come at a time when Kering is streamlining its portfolio and focusing its attention on blockbuster brands including Gucci, Saint Laurent and Balenciaga.

    In early January 2018, the group announced that it would spin off German sportswear brand Puma, inching the parent company further toward becoming a pure luxury player. In the fiscal year ending December 31, 2017, consolidated revenues were €15.5 billion, up 27.6 percent on a reported basis. Sales within the luxury group, which excludes Puma, Cobra and skate brand Volcom, were up 27.5 percent on a reported basis.

    Stella McCartney first launched as a joint venture with the Gucci Group in 2001. At the time, the Gucci Group was run by chief executive Domenico De Sole and Tom Ford, who designed both Gucci and Yves Saint Laurent. Alexander McQueen joined the group in 2000.

    Over the next two decades, McCartney and Kering built a global brand, driven not only by the designer’s exuberant sportswear but also by her commitment to animal-free fashion. McCartney’s faux-fur and faux-leather apparel and accessories helped to elevate the materials in the eyes of the consumer, serving as an example for other brands and a resource for Kering’s entire portfolio, which now also includes Balenciaga, Christopher Kane and Brioni. In 2016, Stella McCartney published its first environmental profit-and-loss account.

    Kering does not break out the revenues of its smaller houses, although in 2015 market sources estimated that Stella McCartney’s annual global sales were somewhere between $150 million and $200 million. However, the annual retail value of Stella McCartney products is likely significantly more thanks to branded collaborations with Procter & Gamble for beauty, Adidas for activewear and Bendon for lingerie. Her collection with Adidas, first launched in 2004, has become a brand in itself. McCartney then launched menswear in 2016.

    As for how Stella McCartney may transform under the founder’s absolute rule, a push to drive more direct sales could be in the cards.

    In May 2017, the company announced that it would open four new store locations, including a second store in Paris, one in Florence, in one Costa Mesa, California, and a second location in New York City.

    A year earlier, it also assumed control of store operations of its three Hong Kong stores, which were previously managed by a local partner. The brand’s retail store portfolio currently includes 52 locations, with another store on London’s Bond Street on the way.

  • Kering to celebrate new sales record

    Kering to celebrate new sales record

    In a “phenomenal” result, global luxury group Kering had record operating revenue last year, driven in large part by the popularity of Gucci.

    Kering’s income totalled €15.4 billion (US$19 billion), up 25 per cent as reported or 27.2 per cent on a comparable basis. Revenue from luxury activities was up 27.5 per cent as reported, or 29.9 per cent on a comparable basis, while for sport and lifestyle activities, revenue was up 12.8 per cent as reported or 14.7 per cent on a comparable basis.

    Describing it as a phenomenal year, chairman/CEO François-Henri Pinault says the group created more than €3 billion in extra revenues in a single year, and generated more than €1 billion in additional EBIT.

    In a performance “nothing short of spectacular”, Gucci was amplifying its desirability across all markets.

    “Saint Laurent is on a rapid growth track, while Bottega Veneta pursues its redeployment. Balenciaga is charting an impressive development trajectory, and our other luxury brands are experiencing positive momentum,” says Pinault.

    Revenue for luxury activities topped €10 billion last year, up 29.9 per cent year on year based on comparable data. Comparable growth was up 44.6 per cent for Gucci and 25.3 per cent for Yves Saint Laurent.

    Other luxury brands saw accelerated revenue growth (up 14.1 per cent on a comparable basis), especially Balenciaga, which delivered the fastest growth rate of all group brands in the second half.
    Puma’s revenue topped €4 billion for the first time, a rise of 15.8 per cent on a comparable basis, while recurring operating income for the brand jumped 92.7 per cent.

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  • Puma Parents Announces Plan To Sell 70% Of Its Stake

    Puma Parents Announces Plan To Sell 70% Of Its Stake

    Luxury fashion brand owner Kering says it will sell off the majority of its Puma stake.

    Under the plan, Kering will reduce its 86 per cent holding in the German athletics-wear label to 16 per cent, the remaining 70 per cent of stock distributed proportionally to Kering shareholders.

    While Puma has proven successful under Kering’s ownership, the Paris-headquartered company wants to shift its focus to what it sees as its core business – luxury brands like Gucci, Balenciaga and Stella McCartney, and a growing focus on watches and jewellery.

    “With Puma’s unique DNA, heritage of innovation and creativity, the ongoing successful implementation of its “Forever Faster” transformation plan has started to deliver results,” said Kering in a statement.

    “The brand is enjoying strong revenue growth momentum and achieving an improvement in its profitability. Furthermore, Puma’s management team is fully committed to pursue its successful strategy, and continue to deliver the growth and profitability potential of the brand.”

    “We are very pleased that Kering has proposed this way to reduce its stake in Puma, said Bjørn Gulden, CEO of Puma. “It would allow us to continue with our current business strategy that has started to show good results. We would be able to carry on to invest in becoming the Fastest Sports Brand in the world, create value for retailers, improve performance for athletes and excite consumers.

    “Puma would become much more attractive for investors as our shares would have a substantially higher free float and larger trading volumes. Kering and [Kering’s largest shareholder] Artémis, however, would remain strong partners and shareholders, which proves that they believe in our strategy and Puma’s future success,” said Gulden.

    The Puma stake divestment will be voted on by Kering shareholders on April 26.

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  • Kering Eyewear, Cartier launch collection

    Kering Eyewear, Cartier launch collection

    Jewellery retailer Cartier has teamed with Kering Eyewear for its latest eyewear collection.

    Presented at the Silmo International Optics and Eyewear Exhibition in Paris, it marks the official start of the companies’ licensing agreement.

    Described as “timeless”, the collection has three main components, Santos de Cartier, C de Cartier and Panthere de Cartier, and introduces new shapes that aim to “redefine the art of eyewear”.

    Effective from January 2, the licensing partnership will see the two luxury groups co-operate to to create a platform for product development, manufacturing and worldwide distribution of Cartier Eyewear.

    Under the terms of the agreement, Cartier owner Richemont has acquired a minority stake in Kering Eyewear, which has also integrated the Manufacture Cartier Lunettes entity in France.

    In June, a lawsuit was filed against Kering, accusing it of false advertising, unfair competition and fraud for claiming its China-produced eyewear had been made in Italy. Kering has denied all charges.

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  • Kering revenues soar 28 per cent, fuelled by Asia-Pacific

    Kering revenues soar 28 per cent, fuelled by Asia-Pacific

    Luxury brand and sportswear retailer Kering has reported first-half consolidated revenue up 28.2 per cent to €7.296 billion.

    Kering revenues in Asia-Pacific, (excluding Japan), soared 34.4 per cent and that market now accounts for 28 per cent of the group’s total sales. Japanese sales rose 20.7 per cent.

    Sales in its luxury division rose 29.7 per cent (28.3 per cent on a comparable basis) and in the sports and lifestyle arm – largely Puma – by 16.1 per cent (14.3 per cent).

    Recurring operating income of €1.27 billion was up 57.1 per cent.

    “Thanks to the execution of our strategy, we achieved outstanding revenue growth in the first half, clearly outperforming the sector, and delivered record profits and operating margins,” said chairman and CEO François-Henri Pinault.

    “These remarkable performances in all regions of the world and across all of our activities underscore Kering’s ability to innovate, create value, and gain market share. Our vision of luxury, grounded in creative audacity and in the sincerity of our brands’ values, is more relevant than ever.”

    A global luxury group, Kering owns a diverse portfoilo of luxury brands, including Gucci, Bottega Veneta, Saint Laurent, Alexander McQueen, Balenciaga, Brioni, Christopher Kane, McQ, Stella McCartney, Tomas Maier, Boucheron, Dodo, Girard-Perregaux, Pomellato, Qeelin and Ulysse Nardin. In the sports and lifestyle sector, it owns Puma, Volcom and Cobra.

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  • Record US$1.1 billion profit for Hermes

    Record US$1.1 billion profit for Hermes

    French luxury goods brand Hermes made a record net profit last year of €1.1 billion (US$1.19 billion), doing “better than we expected”, according to CEO Axel Dumas.

    “We are entering this year on a solid base, but remain cautious in view of an uncertain environment.”
    Known for its $10,000 Birkin bags and $400 printed silk scarves, Hermes says its net profits rose by 13 per cent while its operating margin hit an historic high of 32.6 per cent of sales against 31.8 per cent in 2015.

    Its sales growth mainly stemmed from the strong performance of its leather goods, which accounts for half of group sales. Other divisions also performed well with the exception of its watches unit.

    Hermes joined other luxury companies such as Kering and LVMH in reporting an improvement in the luxury goods sector, which has been hit by slowing demand in China as well as terrorist attacks in France deterring tourism in Europe.

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  • Hermes results show luxury rebound

    Hermes results show luxury rebound

    Rebounding luxury goods sales in Mainland China and improvements in Hong Kong have boosted third-quarter Hermes results.

    Analysts are pointing to these and last week’s strong Kering numbers in tipping the worst may now be over for both luxury markets.

    Hermes reported overnight that sales climbed to 1.26 billion euros (US$1.4 billion) in the last quarter, ahead of estimates.  Sales growth was strongest in Asia-Pacific, up 14 per cent and fuelling a global increase of 8.8 per cent excluding currency fluctuations. That’s the fastest growth rate in two years in the region.

    “The driving trend is that the Chinese customer is slowly coming back,” Makiko Zuercher, who manages the Dynapartners Luxury Brands Fund, told Reuters.

    Chinese customers are the most prolific buyers of luxury goods globally, accounting for about one third of demand. Luxury brands say their return to stores has been driven by government policies encouraging domestic consumption.

    “China is growing at a better pace, mainly because the economy is strengthening and because of domestic consumption,” Hermes CEO Axel Dumas told journalists in a conference call. “In our case, I’m not talking about a rebound, because we always had growth.”

    Hermes’ sales of leather goods rose 16 per cent, with the $9000 Constance purse and $5000 Halzan shoulder bag leading the way.

    After reporting growth of 7.7 per cent for the first nine months of the year, Hermes is predicting full-year growth of just under 8 per cent, a target analysts expect it will exceed.

    LVMH and Richemont have also reported improvements in Asian sales in recent weeks.

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  • Kering sales soar – even in China

    Kering sales soar – even in China

    Luxury goods and apparel giant Kering has reported a 10.5 per cent global rise in revenues in the latest quarter, with luxury sales up 11.3 per cent and sports and lifestyle brands up 9.3 per cent.

    Most significantly, at a time its peers are battling falling sales in Hong Kong, Macau and some brands even in Mainland China, Kering seems to have experienced respectable results in those core markets.

    Paris-based Kering’s brands range from luxury labels Gucci, Bottega Veneta and Yves Saint Laurent through to lifestyle brand Puma. The company says sales in directly operated luxury stores enjoyed double-digit growth across all geographic regions excluding Japan, with strong growth of 24 per cent in Asia-Pacific, a very steady 17 per cent increase in North America and an “extremely good performance” in Western Europe, which expanded by 12 per cent.

    “In a complex environment, we stepped up the pace of revenue growth and continued to gain market share,” said Francois-Henri Pinault, chairman and CEO. “Thanks to the creativity of our brands and the outstanding customer experience they offer, we achieved double-digit increases across all geographic regions excluding Japan.

    “We have laid the foundations for steady, sustainable growth, and are highly confident about the full year.”

    Kering’s headline brand Gucci achieved a sales increase of 17 per cent, while Yves Saint Laurent sales soared 33.9 per cent, both gaining market share from rivals. Sales were up sharply across all product categories and regions, excluding Japan, where market conditions were lacklustre for the sector as a whole. Gucci sales in directly operated stores rose by 19 per cent. Sales from Gucci’s e-commerce website increased by more than 50 per cent during the quarter.

    Overall, Kering’s luxury activities generated €2.115 billion in revenue during the period, the 11.3 per cent same-store growth its fastest quarterly figure in three years.

    But at Bottega Veneta, third-quarter sales were again impacted by slower tourism, particularly in the mature markets of Western Europe and Japan. Revenue was down 10.9 per cent on a comparable basis.

    Here, Hong Kong’s luxury retail decline impacted on the brand, the company said, without divulging figures: “While sales in directly operated stores were lower in the quarter, they delivered a slight improvement compared to the second-quarter trend thanks to resilient sales to local customers in Europe and growth across all main markets in Asia Pacific, with the exception of Hong Kong.”

    Puma’s leap

    Puma’s 10.8 per cent same-store sales leap was the result of the brand building on innovative products and renewed appeal, Kering said. Shoes performed particularly well, posting 17 per cent growth, fuelled by the success of new models such as Ignite, Fierce and Fenty. Revenue from apparel was up a solid 10 per cent.

    “With the exception of Japan, Puma achieved double-digit growth across all geographic regions, enjoying strong performances in Europe and the Americas, and sustained expansion in Mainland China.”

    Kering has an ensemble of luxury fashion, leather goods, jewellery and watch brands: Gucci, Bottega Veneta, Saint Laurent, Alexander McQueen, Balenciaga, Brioni, Christopher Kane, McQ, Stella McCartney, Tomas Maier, Boucheron, Dodo, Girard-Perregaux, Pomellato, Qeelin and Ulysse Nardin.

    Kering also has the sports & lifestyle brands Puma, Volcom and Cobra. The group generated revenues of more than €11.5 billion in 2015 and had more than 38,000 employees at year end.

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  • Alibaba fake fight targets Taobao vendors

    Alibaba fake fight targets Taobao vendors

    Alibaba is tightening the rules for traders selling luxury goods on its popular online platform Taobao.

    It’s one of several measures in the ramping up of the Alibaba fake fight, which is being conducted in conjunction with Washington, DC-based International AntiCounterfeiting Coalition (IACC).

    From May 20, vendors selling luxury products on taobao will have to upload an invoice or authorisation letter from the luxury brands, for examination by Taobao, as proof it has the rights to sell the products. Otherwise the goods will be removed from the website and Alibaba says payments received for such goods can be frozen.

    “To create a healthy shopping environment with a high level of integrity and to protect the legal interests of consumers and brand owners, Taobao is gearing up to regulate sales of luxury brands’ products,” the company said in a letter to traders on May 4.

    The letter coincides with reports that Chinese government agencies plan to clean up the eCommerce market, targeting counterfeit goods and trademark violations. A campaign will run from May through November with stiff penalties for offenders caught.

    Meanwhile, the IACC MarketSafe Program, an initiative started in 2013, is being opened up so that more brands and companies can participate. The MarketSafe program provides companies with an expedited process for working with Alibaba to target and take down online listings for counterfeit goods, reports Alibaba news site Alizila.

    Set to debut later this year, the expanded MarketSafe program will be free of charge to IACC members and non-members, according to Alibaba and the IACC. In addition, brands will no longer be required to provide evidence to support intellectual-property infringement complaints. The changes “will enable a greater number and diversity of rights holders to benefit from a fair, simple, and effective IP enforcement platform,” Alibaba said in a statement.

    Accused by some Western companies of not doing enough to keep listings for counterfeit products off its shopping websites, Alibaba has been trying to enlist greater industry support, arguing the problem is too pervasive and complex for any single company to fight on its own. The Chinese eCommerce giant has for several years been working with the IACC, which has members from a wide range of industries and includes brands such as Burberry, 21st Century Fox and Apple.

    Alibaba last month became the first e-commerce company to join the IACC as an official member. Its admission to membership prompted the walkout of Michael Kors and Kering-owned Gucci.

    IACC President Bob Barchiesi said the expansion of the MarketSafe program is the result of “significant contribution and commitment from both parties.”

    “Collaboration across industries is key to addressing the issue of counterfeiting at a broader level, and this is one of the first steps towards the IACC’s goal of creating a holistic model for tackling online counterfeiting around the world,” Barchiesi said.

    Since the MarketSafe program’s launch, nearly 5000 sellers’ storefronts have been closed and banned from Alibaba’s marketplaces, and more than 180,000 infringing product listings have been removed, even through a “limited number” of brands have been participating, according to Alibaba.

    “This program exemplifies the tangible and mutual success that can be achieved when brands, trade associations, governments and intermediaries work together to combat counterfeiting,” said Matthew Bassiur, VP and head of global IP enforcement at Alibaba Group, in a statement.

    “Alibaba and the IACC, together with the rest of industry, have a shared interest in building a safe and trusted internet environment and marketplace for consumers, rights holders, and sellers,” he added.

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  • Hermes retail sales rose 8pc in Q1

    Hermes retail sales rose 8pc in Q1

    French leather goods maker Hermès Group’s revenue was up 6 percent in the first quarter of 2016, despite a challenging luxury landscape.

    Consolidated revenues for the house were 1.19 billion euro, or about $1.35 billion at current exchange rates. Even with the negative effects of the Paris terrorist attacks, Hermès’ European sales grew 9 percent compared to the same period the previous year, with strong performances of its brand-owned boutiques.

    Trying times
    Japan sales were up 13 percent compared to last year, which Hermès attributes to selective distribution. The rest of Asia saw sales rise 4 percent, with growth in China offset by challenges in Hong Kong and Macao.

    Hermès’ leather goods and saddlery business grew 15 percent in the quarter. The group has recently established new facilities for leather production, with the fifteenth opened on April 1 in Héricourt.

    All other areas of Hermès’ business saw a decline.

    With a slowdown in the United States, Asia and France, ready-to-wear and accessories sales were down 2 percent. Silk and textile sales were down 9 percent, attributed to the recent events in Europe.

    Perfume sales dipped 4 percent, while watches declined 3 percent.

    Its other business ventures, including silvermaker Puiforcat and bespoke shoemaker John Lobb, balked the trend, rising about 30 percent to about $65.6 million in sales.

    Hermes shoe fw 2014
    Hermès fall/winter 2014

    Hermès says that its goal of 8 percent revenue growth at constant exchange rates for 2016 may be out of reach due to economic, geopolitical and currency fluctuations.

    The brand is planning to celebrate the horse this year, with an effort that focuses on its longstanding connection to nature through equestrian arts.

    Other luxury brands are feeling the pinch of current events.

    French conglomerate Kering’s luxury sales in the first quarter of 2016 were buoyed by Western Europe, Japan and emerging markets, as it managed growth in a challenging environment.

    Bottega Veneta’s sales were down 7.6 percent as reported, or 8.3 percent on a comparable basis. The brand was mostly hurt by the strength of the U.S. dollar and by Asian tourists avoiding Europe and other parts of the globe following terror attacks

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  • Another Luxury Retail Brand Cites Tourism Spending as Reason for Slump

    Another Luxury Retail Brand Cites Tourism Spending as Reason for Slump

    French luxury-goods maker Kering SA reported first-quarter revenue that trailed analysts’ estimates as slowing tourism and the strong dollar weighed on demand for Gucci loafers and Bottega Veneta handbags.

    Sales climbed 2.7 percent to 2.72 billion euros ($3.07 billion), Paris-based Kering said in a statement after European markets closed Thursday. Analysts predicted 2.78 billion euros, according to estimates compiled by Bloomberg. Growth was 4 percent on a basis that excludes currency shifts, acquisitions and disposals, compared with the 5.6 percent gain anticipated by analysts.

    Gucci Chief Executive Officer Marco Bizzarri and creative director Alessandro Michele turned Kering’s largest brand around by the end of their first year in charge. Their next challenge is to keep momentum going as a slowdown in China, the strong dollar as well as terrorist attacks in Europe have crimped demand for handbags and garments. Those same headwinds hurt competitor LVMH, whose first-quarter sales also missed estimates.

    Gucci’s comparable sales rose 3.1 percent, slowing from the previous quarter’s 4.8 percent gain. With Michele’s designs accounting for about half of sales in the period, the second straight quarter of growth confirms the turnaround “is starting to get traction,” said Luca Solca, an analyst at Exane BNP Paribas. However, the slower pace shows “Rome wasn’t built in a day.”

    Trends Improved

    The company said in a conference call that sales trends at Gucci have improved since the end of March.

    The biggest disappointment was handbag maker Bottega Veneta, which reported another quarter of declining sales. Revenue fell 8.3 percent, more than twice the decline anticipated by analysts. The brand is suffering from overexposure to Hong Kong and high price gaps between Europe and Asia, along with a slowdown in tourism.

    Bottega may need “more creativity and innovation,” said Exane’s Solca. “Lacking that, the risk could be of appearing boring to consumers.”

    Yves Saint Laurent, which replaced its creative director this month, was again the best performer, posting a 27 percent increase in sales that beat analysts’ expectations.

    “We are confident that we can extend our growth trajectory over the full year,” Kering CEO Francois-Henri Pinault said in the statement.

    Kering’s shares fell 0.8 percent to 160.10 euros at the close in Paris.

     

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  • Swiss luxury retailer Kirchhofer for sale

    Swiss luxury retailer Kirchhofer for sale

    Swiss luxury watch and jewellery retailer Kirchhofer is up for sale, Reuters reports.

    The family owned company, with annual sales of about US$302 million, is thought to produce a net profit of around $60 million annually.

    Reuters reported that three independent sources confirmed Credit Suisse has been engaged to sell the business.

    Kirchhofer sells most famous Swiss watch brands along with jewellery, cosmetics and leather goods. These days it focuses especially on Asian customers.

    Estimate of the value of the company range between five and 10 times the net profit, which calculates at between $300 million to $600 million.

    Likely suitors would include luxury retail giants Kering, LVMH and Richemont, along with private equity investment companies interested in expanding the brand internationally.

    The business is currently owned by Juerg Kirchhofer, the son of founder Fritz Kirchhofer who started the retailer in 1944. It has 10 stores, mostly in tourist cities in Switzerland.

    In a statement to Reuters, Kirchhofer’s finance head, Hans Wolf said no decision had been made to sell the company as yet.

    “Mr Kirchhofer has reached retirement age, which does not necessarily mean he wants to retire soon. Different options are being reviewed and analysed at the moment for the future of the company,” he said.

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