(AOF) – Kering’s turnover is up 27% in the first quarter of 2022, to 4.96 billion euros. The luxury group posted growth of 21% on a comparable basis. Gucci’s revenues reached 2.591 billion euros, an increase of 20% on a reported basis and 13% on a comparable basis. Yves Saint-Laurent had a good start to the year, with sales of 739 million euros, up 43% on a reported basis and 37% on a comparable basis.
“We are starting 2022 with a very solid quarter in a more uncertain environment, particularly impacted since March by the restrictions due to Covid in China. All our Houses recorded double-digit growth over the quarter, with spectacular performances at Saint Laurent, in our Other Houses, particularly Balenciaga, and at Kering Eyewear. Bottega Veneta’s sales are up sharply, on high bases of comparison. Gucci’s growth, which is very strong in North America and Europe, is affected through its exposure to China, where we are strengthening its organization to capture all the dynamism of this market”, declared François-Henri Pinault, the group’s Chairman and Chief Executive Officer.
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– Luxury group born in 1963, owner of the brands Bottega Veneta, Gucci and Yves-Saint-Laurent;
– Turnover of €17.6 billion achieved 44% in Asia-Pacific, 26% in North America and 23% in Europe%;
– Luxury “pure player” business model, based on growth exceeding that of the markets, on the creative autonomy of the Houses, the pooling of support functions and cross-functional expertise and the digital transformation at the service of distribution and client ;
– Capital controlled at 41.74% (58.44% of voting rights) by the Aremis holding company of the founding family, François-Henri Pinault being Chairman and Chief Executive Officer of the 13-member Board of Directors and Jean-François Palus Director deputy general;
– Healthy balance sheet, with net debt of €168m compared to €13.7bn in shareholders’ equity, which was strengthened in January by the sale of the watchmaking activities.
Challenges
– Innovation strategy on 3 pillars: new business models, new materials and support functions / investment in companies with innovative business models, such as Vestiaire Collective, MIL laboratories for sustainable alternatives in jewelry and textiles, recourse blockchain to counter counterfeiting, etc. / robust logistics infrastructure serving the customer experience: Luce application on product availability, virtual offer based on data, internalization of sites, etc. / growth in e-commerce (15 % of sales in 2021);
– 2025 environmental strategy “Care for the planet”, reported in an environmental income statement: use resources in compliance with “planetary limits” and reduce the group’s CO2 emissions by 50% / work on the chain’s environmental impacts (CO2 emissions, water consumption, air and water pollution, waste production and land use) / create a “Supplier Sustainability Index” and raise the traceability of well- being animals, using chemicals / promoting “sustainable design” / creating Materials Innovation Lab (MIL) dedicated to Watches and Jewelry after that of fabrics and textiles / completing the offsetting of CO2 emissions) for biodiversity.
Challenges
– Strong dependence on Gucci, 1st revenue contributor and most profitable brand;
– Acceleration of the growth of YSL and Bottega Venetta and resistance of Gucci to confinements in China;
– Impact of the Russia-Ukraine war: very low, with the closure of 2 stores and 4 corners;
– 2021 dividend of €12 with deposit.
City center stores: a worrying drop in footfall
Between 2013 and 2021, footfall in stores in city centers fell by almost 40%. This drop reached 29.4% for shopping centers over the same period. Procos emphasizes that this movement results in particular from the multiplication of the offer and the development of e-commerce. Small town centers and mega-malls are the most resilient. The former respond to local needs and the latter exert a force of attraction on a regional scale. With the Assises du commerce in December 2021, the government launched three weeks of reflection to outline a vision for 2030 and support the investments necessary for digital and environmental transitions.