The French luxury conglomerate, which has posted consolidated revenue up 13.3% on a comparable basis to €15.88 billion in 2019, has closed half of its stores in China and is relocating inventory to other regions of the word, reports ILM.
Kering’s consolidated revenue increased 13.3% on a comparable basis to €15.88 billion for full year 2019, with “very sustained growth” at Gucci; up 13.3% on a comparable basis. The Group reported an “outstanding increase” in revenue from Saint Laurent throughout the year (+14.4%), and a return to growth at Bottega Veneta (+2.2%). Revenue at Other Houses increased 17.8% in the year, attributed to a momentum at Balenciaga and Alexander McQueen. However, net income is reported to have dropped 37.4% to €2.3 billion in 2019, partly impacted by an Italian tax settlement of €1.25 billion linked to Gucci. Read more here.
“Kering delivered another year of sustained profitable growth in 2019, as total revenues significantly exceeded the €15 billion-mark and our recurring operating margin topped 30% for the first time ever. We are pursuing the implementation of our strategy; we are focussed on developing our Houses, executing flawlessly, and creating value”, said François-Henri Pinault, Chairman and CEO, Kering. Referring to China, he said the “particularly uncertain conditions don’t call into question Kering’s fundamentals in the luxury industry” and the Group remains confident in its growth potential in the medium and long term.
Pinault said the Kering brands were experiencing a sharp drop in traffic and sales in mainland China and, as a result, the Group closed half of all its stores with those that remain open operating at reduced hours. Providing no estimates for the impact of the coronavirus on Kering’s activities, he said the Group is reallocating inventory to other regions of the world to avoid overstock in China. Excluding Japan, the luxury conglomerate makes 34% of its sales in the Asia Pacific region. Meanwhile, the Group has halted new store openings and ad campaigns due to the epidemic.