Kering’s Jewelry Brands Had an ‘Exceptional’ Year

FinancialsFeb 18, 2022

Kering’s Jewelry Brands Had an ‘Exceptional’ Year

The luxury conglomerate posted record overall revenue in 2021.

20220218_Kering header.jpg
A pair of sun-shaped diamond hoops set with 35.93 carats of emeralds from Kering-owned Boucheron’s new high jewelry collection. Kering’s revenue was up 35 percent year-over-year.
Paris—Kering had a strong end to its fiscal year, reporting record revenue for 2021 and exceeding pre-pandemic 2019 levels, and its jewelry brands stood out as a bright spot on the balance sheet.

CEO François-Henri Pinault said during an earnings call Thursday the luxury giant may look into acquisitions in the near future, including in jewelry.

“We will very actively look at a potential acquisition, if it makes sense in terms of our portfolio strategy going forward and we have the means to do that,” he said.

The company behind Gucci, Saint Laurent, and other high-end brands posted fourth-quarter revenue of €5.41 billion ($6.14 billion), a 35 percent increase year-over-year and 24 percent higher than the fourth quarter of 2019.

For the full year, revenue was up 35 percent year-over-year to €17.64 billion ($20.05 billion) and up 11 percent compared with 2019.

“All our houses are stronger than ever before, and we are confident we will extend last year’s momentum in 2022 and in coming years,” said Pinault in a press release about the results.

The company’s watch and jewelry brands, including Pomellato and Boucheron, fall into its “other houses” division, alongside Alexander McQueen and Balenciaga.

Quarterly revenue in the “others” division totaled €945.4 million ($1.07 billion), a 36 percent increase year-over-year and a 35 percent increase compared with 2019.

For the full year, revenue in this category was up 43 percent year-over-year to €3.26 billion ($3.71 billion) and up 29 percent compared with 2019.

It was an “exceptional year for jewelry,” said Kering. “Boucheron enjoyed success in new markets, Pomellato continued to grow at an exceptional pace, and Qeelin saw very rapid expansion.”

Boucheron recently debuted its latest high jewelry collection. Called “New Maharajahs,” it draws inspiration from the style of Bhupinder Singh, the Maharajah of Patiala, who paid a visit to the jeweler in Paris in 1928.

“Boucheron is capitalizing on its exceptional offerings in high jewelry and jewelry to confirm its promises and its strong potential in Asia-Pacific,” said Chief Financial Officer Jean-Marc Duplaix during the company’s earnings call Thursday.

Qeelin is seeing “explosive growth,” said Kering, with the brand’s sales up 2.5 times compared with 2019 levels. The brand is doing especially well in the Asia-Pacific region.

Pomellato could be next in line to see strong growth, said Kering.

“Pomellato, which still derives the bulk of its revenue from Europe, is gradually expanding its footprint, leveraging its iconic lines and new launches,” said Duplaix.

Kering recently sold watch brands Ulysse Nardin and Girard-Perregaux back to their management teams.

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Quarterly revenue from Kering’s directly operated stores, including e-commerce, was up 39 percent year-over-year and up 34 percent compared with 2019.

For the full-year, revenue from these stores rose 40 percent year-over-year. It was up 18 percent compared with 2019.

Online sales continued to grow, up 55 percent year-over-year, and now accounting for 15 percent of total sales in the retail network, up from 13 percent of sales last year.

Wholesale revenue was up 17 percent year-over-year, but down 3 percent compared with 2019, which is in line with the company’s “increasingly exclusive” approach to distribution.

By region, sales in North America were up 63 percent year-over-year in the quarter and up 76 percent in the full year. Compared with 2019, sales were up 82 percent.

As the U.S. luxury market continues to grow, Pinault said the company may expand its network into “second- and third-tier” cities like Atlanta and Nashville. A Gucci store is set to open soon in Austin.

Kering has been looking to boost its sustainability efforts, joining forces with Richemont-owned Cartier to launch the Watch and Jewelry Initiative 2030 in partnership with the Responsible Jewelry Council, an effort to set industry-wide sustainability goals.

The company also recently announced it would no longer use fur as of fall 2022.
Kering did not provide specific guidance for the next fiscal year.

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