Kering’s 2020 Revenue Sinks Despite Online Growth

FinancialsFeb 17, 2021

Kering’s 2020 Revenue Sinks Despite Online Growth

But jewelry brands Boucheron and Qeelin continued to perform well in the Asia Pacific region.

A Nudo Cascade necklace by Kering-owned brand Pomellato, featuring peridot, white topaz, and tsavorite garnet

Paris—Kering ended its fiscal year on a low note, posting a decline in revenue, but the luxury titan’s online sales continue to climb.

The company behind Gucci, Yves Saint Laurent and other high-end brands saw a decline in overall revenue in the fourth quarter and the full year.

Fourth-quarter revenue totaled €4 billion ($4.82 billion), an 8 percent decline compared with €4.36 billion ($5.25 billion) a year ago.

Full-year revenue fell to €13.1 billion ($15.76 billion), an 18 percent decrease compared with €15.88 billion ($19.11 billion) a year ago.

Retail sales overall were down 16 percent year-over-year, attributed to store closures and a halt in tourism, though the company saw a “sharp rebound” in the second half led by North America and Asia Pacific.

Wholesale sales were down 17 percent on a comparable basis.

Online sales, meanwhile, were particularly strong, up 68 percent year-over-year, accounting for 13 percent of total sales.

In North America, online sales grew 89 percent on a comparable basis, accounting for 24 percent of retail sales compared with 13 percent a year ago.

“In a year of disruption, Kering demonstrated remarkable resilience and agility,” said CEO François-Henri Pinault in a press release about the results.

“We achieved a solid top-line recovery in the second half, we protected our margins while continuing to invest in our houses and growth platforms, our cash flow generation remained elevated, and we further strengthened the group’s financial structure.”

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

Full-year revenue in the “others” division totaled €2.28 billion ($2.74 billion), a 9 percent decrease on a comparable basis, while quarterly revenue totaled €693.1 million ($834 million), a 1 percent decrease compared with last year.

In this division, retail sales were down 5 percent for the full year while wholesale revenue fell 13 percent.

Alexander McQueen and Balenciaga were top performers, posting double-digit growth in retail and wholesale as the brands expanded their store network in Asia Pacific and North America while seeing a boost in online sales.

The jewelry houses suffered due to their exposure to the Western European market, an area still under COVID-19-related restrictions, while sales growth in Asia was strong.

Boucheron performed well in the Asia Pacific region, and Qeelin sales climbed due to a strong recovery in mainland China, said Kering, while its watch brands are focusing on prime distribution.

By region, overall sales in North America were

down 8 percent while sales in Western Europe fell 28 percent.

Sales in the Asia Pacific region slipped 7 percent while sales in Japan sank 29 percent.

Kering did not provide financial guidance for the year ahead, but Pinault said: “More than ever, I am convinced that our strategy and business model are perfectly in sync with the current and future trends of the luxury universe.”
Lenore Fedowis the associate editor, news at National Jeweler, covering the retail beat and the business side of jewelry.

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