Luxury goods group Kering – whose brands include duty free favourites such as Gucci, Saint Laurent and Bottega Veneta – generated “outstanding operating performances” in 2018 according to Group Chief Financial Officer Jean-Marc Duplaix.
Comparable revenue grew by 29.4% to €13,665 million (US$11,994 million) while operating income soared by 47% to just shy of €4,000 million (€3,944 million/US$3,462 million).
The results (see end table) pushed Kering’s shares up today from their opening price of €433 to a morning peak of €468. Growth came across all Kering’s global regions with every one delivering gains of at least 23%.
Italian fashion house Gucci was the outstanding brand performer in the portfolio. It returned comparable revenue growth of 36.9% to €8,282 million, pushing Gucci over the 60% mark in terms of share of Kering’s sales. This came on top of extremely high comparatives since H2 2016, underscoring the brand’s continuing heightened popularity .
10% of Gucci’s sales to come from travel retail
Kering Chairman & CEO François-Henri Pinault made plain his desire that Gucci would avail itself of the opportunities in travel retail via organic growth, buybacks, and new openings. He said that 10% of Gucci’s sales in the medium term would come from duty free, with €1 billion coming from e-commerce in the same period.
Other key brands saw a more mixed picture. Based on comparables, Saint Laurent was up +18.7%, to €1,744 million; Bottega Veneta was down 3.4% to €1,109 million impacted by lower tourist spending in Europe and mixed performances in world regions, particularly Asia Pacific; while other houses (including Balenciaga, Alexander McQueen and Boucheron) drove a revenue rise of +32.1% to €2,109 million.
Saint Laurent is also expected to expand in travel retail and local markets. In 2018 it had 219 directly-operated stores with openings, notably in EMEA, North America, Greater China, and travel retail.
In the relatively new eyewear business, Kering Eyewear posted comparable revenue growth of 46% to €391 million. According to Kering, there was very strong growth for Gucci, its Cartier launch was “a resounding success” and initial Balenciaga and Montblanc collections (available in early 2019) had an “enthusiastic reception”. The company also noted an acceleration in Q4 of 72% (comparable), with double-digit growth in all regions and distribution networks.