Kering’s Jewelry Brands Shine as Gucci Recovers
Boucheron had a “remarkable” first quarter while Pomellato posted solid growth.
However, its jewelry houses, which include Boucheron and Pomellato, had an “outstanding” quarter, said the company.
Kering’s overall performance stood in contrast to rival luxury titan LVMH’s strong start to the year, with revenue up double digits.
Here are four important takeaways from Kering’s most recent earnings report.
Q1 sales faltered as Gucci revenue lagged.
Kering posted first-quarter revenue of €5.08 billion ($5.57 billion), up 2 percent year-over-year.
Sales for Gucci, a top-performing brand for the luxury conglomerate, posted a modest increase of just under 1 percent.
Revenue from Kering’s directly operated stores, which includes its e-commerce sites, was up 4 percent year-over-year on a comparable basis, driven by a strong performance in Western Europe and Japan.
Wholesale sales and other revenue fell 10 percent as Kering reduces wholesale in its distribution system.
“Kering’s performance in the first quarter remained mixed, as we had anticipated,” said CEO François-Henri Pinault in a statement.
“As we work to augment the desirability of our brands and raise their profile in key markets, we are encouraged by the gradual improvement in activity month after month during the period. A host of initiatives undertaken by all our Houses to enhance their appeal and exclusivity lays the foundations for sustained, profitable growth.”
The company did not provide financial guidance for the year ahead.
Jewelry sales shined brightly.
The company’s jewelry brands fall into its “other houses” division, alongside Alexander McQueen and Balenciaga.
Its jewelry portfolio consists of Boucheron, Pomellato, DoDo, and Qeelin.
For the first quarter, revenue in the division totaled €890 million ($976 million), down 9 percent year-over-year.
Jewelry sales, however, increased by double digits, said Kering.
“Boucheron once again posted an excellent quarter, fueled by sales in its stunning high jewelry collection as well as from the house’s well-established jewelry lines,” said Chief Financial Officer Jean-Marc Duplaix on an earnings call Tuesday afternoon.
Pomellato saw “robust growth” in Western Europe, Japan, and the Asia Pacific region.
“Qeelin took full advantage of the reopening of the Chinese market,” he said, noting the brand recently launched a bridal collection.
Sales in the overall division in Kering’s directly operated retail network rose 7 percent on a comparable basis.
Wholesale revenue sank 32 percent due to the streamlining of its wholesale distribution.
Kering will continue to invest in Gucci.
The slight rise in sales for Gucci in Q1 may signal a slow recovery for the brand after it struggled in the fourth quarter, with sales falling by double digits due to the COVID-19 situation in China.
The brand also lost its creative director, Alessandro Michele, who departed at the end of last year, recently replaced by Sabato de Sarno.
“Q1 has not changed our views on Gucci because at the end of the day, we have invested a lot in Gucci already. We will continue to invest,” said Duplaix.
“The work we are doing at Gucci is a journey, not a race, and we don’t expect it to pay off in the very short term,” he added.
“But we are extremely heartened by our progress to date, by the drive of all the teams and by the reaction in the market.”
Gucci recently opened a Gucci Salon on Los Angeles’ famed Melrose Place.
The luxury destination, described by the brand as “a transformative, creative space,” isn’t open to the public, but instead will serve high-end clients by appointment only, with more spaces to follow throughout the year.
Last week, the European Commission conducted an inspection of Gucci’s Italian premises as part of a preliminary investigation into the fashion sector in multiple countries under E.U. antitrust rules. Kering is fully cooperating with the investigation, said the company.
Sales in North America slipped amid U.S. market weakness.
Kering’s sales in North America fell 18 percent year-over-year in the first quarter.
Duplaix, the company’s CFO, attributed the decline in part to a weaker performance in the United States, a trend also noted in Q4.
While in-store foot traffic was up, he said that doesn’t always translate into sales.
Notably, there was weakness in demand from “aspirational clients,” Duplaix said.
“There is still potential to continue to grow in the U.S.,” he said, noting it’s an important luxury market, even more so than in previous years.
North America was Kering’s third-largest market by revenue percentage in the first quarter, accounting for 21 percent of total revenue, down from 27 percent in Q1 2022.
Japan saw the strongest growth with quarterly revenue up 30 percent followed by Western Europe at 15 percent, then Asia Pacific at 10 percent.
Sales in the rest of the world slipped 1 percent.
Kering operated 1,673 stores as of Q1, adding a net 14 stores in the quarter.
The Latest
The necklace is featured in the brand’s “Rebel Heart” campaign starring Adam Levine and Behati Prinsloo.
The two organizations will host a joint event, “Converge,” in September 2025.
Big changes appear to be on the horizon for the diamond miner and its parent company, Anglo American.
With Ho Brothers, you can unlock your brand's true potential and offer customers the personalized jewelry experiences they desire.
Padis succeeds Lisa Bridge, marking the first time the organization has had two women board presidents in a row.
Jesse Cole, founder of Fans First Entertainment, shared the “five Es” of building a fan base during his AGS Conclave keynote.
The Royal Oak Perpetual Calendar "John Mayer" was celebrated at a star-studded party in LA last week.
For over 30 years, JA has advocated for the industry, fought against harmful legislation and backed measures that help jewelry businesses.
The announcement came as the company reported a 23 percent drop in production in Q1.
The three-time Pro Bowler continues to partner with the retailer, donating to a Detroit nonprofit and giving watches to fans.
A double-digit drop in the number of in-store crimes was offset by a jump in off-premises attacks, JSA’s 2023 crime report shows.
Inspired by the Roman goddess of love, the designer looked to the sea for her new collection.
The selected nine organizations have outlined their plans for the funds.
The mining company’s Diavik Diamond Mine lost four employees in a plane crash in January.
The crown introduced a dozen timepieces in Geneva, including a heavy metal version of its deep-sea divers’ watch.
Emmanuel Raheb recommends digging into demographic data, customizing your store’s communications, and retargeting ahead of May 12.
Located in the town of Queensbury, it features a dedicated bridal section and a Gabriel & Co. store-in-store.
A 203-carat diamond from the alluvial mine in Angola achieved the highest price.
Ruser was known for his figural jewelry with freshwater pearls and for his celebrity clientele.
The “Rebel Heart” campaign embodies rebellion, romance, and sensuality, the brand said.
Editor-in-Chief Michelle Graff shares the standout moments from the education sessions she attended in Austin last week.
The overhaul includes a new logo and enhanced digital marketplace.
The money will go toward supporting ongoing research and aftercare programs for childhood cancer survivors.
A new addition to the “Heirloom” collection, this one-of-a-kind piece features 32 custom-cut gemstones.
Last month in Dallas, David Walton pushed another jeweler, David Ettinger, who later died.
The move will allow the manufacturing company to offer a more “diverse and comprehensive” range of products.
From now through mid-May, GIA will be offering the reports at a 50 percent discount.