Kering, the luxury group behind brands like Gucci and Saint Laurent, has reported a revenue of €13.1 billion for the year 2020, representing a decrease of -16.4% compared to the previous year. Although slightly below analysts’ expectations, the company remains optimistic about its performance and the resilience of its brands.
Gucci, the flagship brand of Kering, generated €7.4 billion in revenue in 2020, making it the biggest contributor to the group’s overall revenue. Despite a decline of 21.5% compared to the previous year, Gucci has been praised for its “solid fundamentals.” This can be attributed to its successful digital transformation efforts and the accelerated shift towards online shopping during the Covid-19 pandemic. Gucci experienced a significant increase of 70% in online sales in 2020. The brand revamped its mobile application and expanded its presence in the Chinese e-commerce market through a partnership with Alibaba’s Luxury Pavilion.
Saint Laurent, another brand under the Kering umbrella, had a revenue of €1.7 billion in 2020, which represented a decline of -13.8%. However, the brand showed signs of recovery with a 2.1% growth in the second half of the year. On the other hand, Bottega Veneta, known for its recent exit from social media platforms, experienced growth with a revenue of €1.2 billion, an increase of 4.8%. The brand’s collections by British designer Daniel Lee gained popularity, particularly in the Asia-Pacific region, leading to a global growth of 18% in the second half of the year.
Overall, Kering’s fashion houses generated a total revenue of €12.6 billion in 2020, reflecting a decrease of -16.5% compared to the previous year. The first half of the year was particularly challenging due to the impact of the pandemic, resulting in a decline of -30.2% in sales. However, the situation improved in the second half of the year, with a decline of only -3.3%, despite new restrictions in certain regions. Kering attributes some of the decline in wholesale sales (-17.4%) not just to the pandemic, but also to its strategy of streamlining distribution and focusing on exclusivity.
Looking ahead, Kering plans to invest further in e-commerce, omnichannel strategies, logistics, and technological infrastructure. E-commerce sales experienced a significant increase of 67.5% in 2020, now accounting for 13% of Kering’s total distribution network sales. The company is committed to driving growth in the digital retail space and adapting to the changing landscape of the luxury industry.
In conclusion, despite the challenges posed by the Covid-19 pandemic, Kering has displayed resilience and adaptability in the performance of its luxury brands. The second half of 2020 showed promising signs of recovery, driven by strong online sales and successful strategies in key markets. Kering’s focus on selective expansion and investments in digital retail further demonstrate its commitment to navigating the evolving luxury industry.
Useful links:
1. Kering Official Website
2. Alibaba Group Official Website
