Kering, the prestigious conglomerate overseeing renowned luxury labels such as Gucci and Balenciaga, has exceeded expectations with their operating profit performance for the first half of the year. Despite apprehensions surrounding the impact of the ongoing U.S.-China trade conflict on luxury goods demand, Kering showcased an outstanding 53 percent surge in recurring operating income, reaching a remarkable 1.77 billion euros.
Among Kering’s illustrious brands, Gucci has emerged as a standout performer, showcasing extraordinary growth that positions it favorably against competitors like LVMH’s Louis Vuitton. The Italian fashion powerhouse displayed a notable 40.1 percent increase in comparable revenues in the second quarter, following an impressive growth rate of nearly 49 percent in the initial quarter.
Looking towards the future, Kering’s managing director, Jean-Francois Palus, emphasized the company’s decision not to divest any additional smaller fashion brands beyond the ones currently undergoing transitions. Despite prior discussions regarding potentially selling brands such as Christopher Kane and winding down joint ventures with labels like Stella McCartney, Palus made it clear that Kering remains steadfast in maintaining control over its existing portfolio.
Earlier this year, Kering made significant strides in optimizing its business operations by divesting the majority of its Puma stake to shareholders and hinting at the potential sale of skatewear brand Volcom. These strategic actions align with Kering’s refocused commitment to the luxury segment, prioritizing organic growth strategies over acquisitions.
In light of these pivotal developments, Kering’s resilience amidst market uncertainties, notably related to China, underscores the robustness and endurance of its luxury brands, particularly Gucci. With a continued emphasis on meticulous strategic planning and fostering organic growth, Kering appears well-positioned to uphold its position as a trendsetter in the global luxury fashion landscape.
For more information on Kering and its luxury brands, visit Kering and Gucci.
