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Gucci, Yves Saint Laurent Lead Kering to 27.6 Percent Revenue Rise

Led by its iconic Gucci and Yves Saint Laurent brands, Kering scored strong revenue gains in the third quarter, even as sales at subsidiary Bottega Veneta declined.

In a nutshell: In announcing its third quarter revenue on Tuesday, Paris-based Kering said it “outpaced its market,” with its luxury brands achieving significant sales growth that was “well balanced across all distribution channels.” The French group said comparable growth in directly operated stores was 27.6 percent, driven by double-digit increases across all regions, led by North America and Asia Pacific. Growth in online sales topped 80 percent, while wholesale rose 27 percent on a comparable basis.

At Gucci, Kering cited the success of permanent collections and newness across all product categories in all distribution channels. Yves Saint Laurent also performed well, the company noted, with wholesale revenue advancing 14.2 percent year-on-year, reflecting the success of the women’s Fall-Winter collection, Kering said.

At Bottega Veneta, Kering said new products in the leather goods category performed well and the wholesale network posted growth for the second consecutive quarter. However, lower sales from directly operated stores dragged down overall revenue. New creative director Daniel Lee is currently “remolding the Bottega Veneta universe,” the company said, and will make his debut in Tokyo in early December and will present his first full collection in February.

Sales: Consolidated revenue in the third quarter ended Sept. 30 was up 27.6 percent, to 3.4 million euros ($3.87 million) compared to the year-ago period. This was led by a 35.1 percent increase at Gucci, to 2.1 billion euros ($2.39 billion), with strength across all distribution channels, regions and product categories. Gucci retail sales grew 35 percent on a comparable basis, with gains in all regions, led by Asia Pacific and North America. E-commerce sales increased nearly 70 percent, while wholesale was up 36.3 percent.

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Yves Saint Laurent posted a 16.1 percent gain, to 447 million euros ($509.34 million), with double-digit growth in all regions. Sales in directly operated stores rose 17.5 percent on a comparable basis, including a 27.5 percent rise in North America.

The company’s Bottega Veneta unit, in transition mode with a new creative director, saw revenue in the quarter drop 7.8 percent, to 259 million euro ($295.12 million), impacted in its directly operated stores by lower tourism in Western Europe.

CEO’s Take: François-Henri Pinault, chairman and CEO, said: “Our growth, whose pace is unprecedented in the luxury sector, is sound, well-balanced and sustained across all regions and distribution channels. The talent of each of our houses at creating strong emotional ties with its customers, conceiving a bold, generous creative universe and reinventing its codes is at the root of Kering’s success. Beyond short-term developments, we know that the secular growth of the luxury market, but particularly our solid fundamentals and the discipline with which we implement our strategy, will continue to support our operating and financial out-performance.”