FinancialsApr 13, 2023
LVMH Talks Tiffany Flagship Reopening, Makes Another AcquisitionFinancialsApr 26, 2023
Kering’s Jewelry Brands Shine as Gucci Recovers
Boucheron had a “remarkable” first quarter while Pomellato posted solid growth.
Pictured here is the “New Maharani Necklace,” set with a 4.08-carat cushion-cut diamond, as well as diamonds and rock crystal, in 18-karat white gold from Kering-owned Boucheron’s “New Maharajahs” high jewelry collection. Kering’s jewelry brands put on an “outstanding” performance in Q1 2023, said the company.
Paris—Kering posted muted first-quarter results as its star brand, Gucci, continues its recovery.
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.
Related stories will be right here …
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.
More on Financials
The Latest
TrendsJun 02, 2023
Take a Peek at Couture’s Newest Design Talents This year’s Design Atelier is full of gems.
CollectionsJun 02, 2023
Piece of the Week: Saboo Fine Jewels’ Emerald EarringsThey’re a testament to the power of excellent design.
IndependentsJun 02, 2023
These Are the 2023 Retailer Hall of Fame InducteesThis year’s honorees include one of Florida’s largest independent jewelers and two multi-store independents in the Chicago and New York areas.
Brought to you by
The Next Step for GIA Diamond ReportsThe most trusted diamond report, available in print or the GIA App.
TrendsJun 01, 2023
See 50+ Jewels Debuting at Couture in Las VegasThe industry’s most influential contemporary designers are showcasing their latest jewelry designs.
Weekly QuizJun 02, 2023
This Week’s QuizTest your jewelry news knowledge with this short test.
Lab-GrownJun 01, 2023
35-Carat Lab-Grown Diamond Going on Display in VegasCreated by Maitri Lab-Grown Diamonds and graded by IGI, it’s slightly bigger than the record-setting lab-grown diamond GIA just examined.
MajorsJun 01, 2023
Bottom Line Marketing Announces Restructured Leadership, New Service OfferingsThe marketing agency has integrated its first C-suite.
Brought to you by
Beyond Borders: Crucial Factors in Colored Stone Origin DeterminationNavigate origin determination with Continuing Education seminars offered by the GIA Alumni Collective™.
Events & AwardsJun 01, 2023
Meet JCK’s 2023 Keynote SpeakerThe jewelry trade show also will debut educational content centered around social media.
TrendsMay 31, 2023
Here’s a Sneak Peek of New Jewelry to Check Out at JCKLuxury kicks off today, with the full show in swing on Friday.
CollectionsMay 31, 2023
Verragio’s Debut Fine Jewelry Collections Honor Company HeritageOne of the three new collections was inspired by the legend of a woman who traded her mansion to Cartier for two strands of natural pearls.
MajorsMay 31, 2023
Signet Jewelers Names New Head of Investor RelationsRob Ballew will be tasked with communicating the jewelry giant’s plans and financial performance to investors.
MajorsMay 31, 2023
Jewelers Mutual Launches App for Retailers, Introduces New BrokerageWith the app, customers receive a 15-day insurance offer on new purchases while their coverage needs are being evaluated.
Lab-GrownMay 30, 2023
Lightbox Is Testing Out a Trendy Concept Shop in BrooklynIt is in House of Showfields, a bazaar-style retail space in the borough’s Williamsburg neighborhood.
Events & AwardsMay 30, 2023
These Are the Can’t-Miss JCK Talks Education SessionsFrom consumer trends to retail technology, these are the JCK Talks sessions that should be on attendees’ radar.
AuctionsMay 30, 2023
Sotheby’s to Auction Mellon Family JewelrySignature pieces from Cartier and David Webb will appear in the June jewelry auction.
Events & AwardsMay 30, 2023
24 Karat Club of Southern California Recognizes 3 HonoreesThey will be celebrated at the annual dinner dance and gala in the fall.
GradingMay 26, 2023
State of the Diamond Industry: AI and the Future of Diamond GradingGemologists have long used machines in diamond grading but technology has made it possible for them to “learn” how to do it on their own.
Recorded WebinarsMay 26, 2023
Watch: Diamond Cut Quality: The Final Frontier Part 2Supplier Spotlight Sponsored by IGI
Recorded WebinarsMay 26, 2023
Natural and Lab-Grown Diamonds: What It’s Like to Sell Both Watch retailers Jeffery Bolling and Bobby Bengivengo discuss employee training, customer education and the sticky subject of future value.
AuctionsMay 26, 2023
Piece of the Week: A Bulgari Sapphire and Diamond NecklaceSet with a 118-carat unheated Sri Lankan sapphire, it just sold for $3.4 million at Phillips jewelry auction in Hong Kong.
Supplier BulletinMay 25, 2023
RAE Fine Jewelry Collection Debuting at JCK Luxury 2023Sponsored by Noam Carver
TechnologyMay 25, 2023
State of Retail: Why Jewelers Need to Invest in Cybersecurity NowAs cybercrime incidents threaten the industry, jewelers need to know what they’re up against and the best ways to protect their businesses.
IndependentsMay 25, 2023
Louis Anthony Jewelers Is Remodeling and ExpandingThe Pittsburgh jeweler is redoing the lighting and showcases, and adding a full hospitality bar as well as new shop-in-shops.
SourcingMay 25, 2023
David Yurman Unveils Quartz Exhibition at AMNH The Yurman Family Crystalline Pass is inside the museum’s brand-new Richard Gilder Center.
MajorsMay 25, 2023
Stanley Zale Joins Hill & Co. as Principal Consultant Zale has more than 40 years’ experience in the diamond industry, including 17 years as Stuller’s VP of diamonds and gemstones procurement.
Events & AwardsMay 24, 2023
New To-Dos in Las Vegas During Jewelry Market Week 2023The Strip is full of new restaurant and entertainment offerings.
