A few days after LVMH, another major player in the luxury industry, Kering, has released its first quarter results for 2020. Despite facing challenges due to the COVID-19 pandemic, the company remains resilient and focused on its core values.
Initially, Kering estimated a decline of around -13% to -14% in reported data or -15% in comparable data compared to the first quarter of 2019. However, the actual decline was slightly worse. The closure of workshops and stores, as well as a significant decrease in local sales and tourist flows, led to a decline of -15.4% in reported data and -16.4% in comparable data, resulting in an estimated revenue of 3,203.2 million euros.
François-Henri Pinault, CEO of Kering, acknowledged the impact of the pandemic on the company’s activities in the first quarter. From the early days of the outbreak, Kering has taken measures to ensure the safety of its teams and customers worldwide. They have also provided support to healthcare workers and hospitals in the countries where they operate. Pinault expressed gratitude to all employees for their commitment during this uncertain period.
Despite a promising start to the year, Kering was affected by the rapid spread of COVID-19 in key markets. However, the company is working diligently to ensure business continuity and prepare for the restart. Adapting the cost base and preserving liquidity are top priorities. Kering’s financial structure and agility are valuable assets in navigating this unprecedented situation. Pinault expresses confidence in the resilience and values of Kering’s brands, which will emerge stronger at the end of this uncertain period.
Gucci, one of Kering’s major brands, experienced a significant decline of -23.2% in comparable data. This was primarily due to the impact on the Maison’s activity in Asia-Pacific and with the Chinese tourist clientele worldwide. However, there are signs of gradual recovery in mainland China with the reopening of stores.
In contrast, Saint Laurent showed a decline of -13.8%, and Bottega Veneta had a strong performance with a growth of +8.5%. Bottega Veneta’s success can be attributed to the popularity of collections by artistic director Daniel Lee, which resulted in strong order books.
The other brands within the Kering group, including Balenciaga and Alexander McQueen, experienced a more moderate decline of -5.4% in comparable data. While the Watch and Jewelry division was highly impacted, the Couture and Leather Goods division demonstrated remarkable resilience.
As part of its response to the crisis, Kering confirmed a 25% reduction in François-Henri Pinault’s fixed remuneration until the end of the year.
Useful links related to the article:
1. Kering Official Website
2. Kering Financial Calendar
