Kering’s Earnings Weren’t All Gucci For 2020

Bottega Veneta was the sparkling jewel in Kering’s crown for 2020. Every other house’s revenue fell as the luxury conglomerate endured the ramifications of the COVID-19 pandemic. Gucci bore the hardest blow with the largest drop in sales out of all houses, but continued to be Kering’s biggest money-maker by far, maintaining a loyal customer base in mainland China — a bright spot that began to emerge in the second half of a very difficult year. “Kering demonstrated remarkable resilience and agility,” said Francois-Henri Pinaut, Chairman and Chief Executive Officer.

On February 17, Kering reported a consolidated revenue of €13,100.2 million, down 17.5 percent. Despite moderately improving later in the year, Gucci was down 22.7 percent. Yves Saint Laurent revenue fell 14.9 percent. Other Houses decreased by 10.1 percent, yet Bottega Veneta was the only one to triumph, embracing growth of 3.7 percent as reported. 

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As stores closed and online shopping boomed through COVID-19 lockdowns worldwide, e-commerce, in general, accounted for 13 percent of Kering’s total sales. Gucci saw a nearly 70 percent increase in online sales and an improved sales fall from 19.5 percent in the first half to just 5.9 percent in the second, which contributed to its revenue of €7,440.6 million in 2020. Yves Saint Laurent also saw a huge increase in online revenue at 80 percent.

However, wholesale figures tended to slump for the majority, down 17.4 percent on a comparable basis, due to a combination of store closures and Kering’s strategy to enhance its distribution network’s exclusivity; something that Bottega Veneta showed promise in having implemented as their wholesale figures grew 48.5 percent, as a result of their exclusive selection of wholesale partners, and evidently, successful collections from creative director Daniel Lee.

Another area which suffered the brunt of pandemic-induced store closures was Kering Eyewear, which saw sales fall by 17.6 percent, yet, again, revenue did start to recover in the second half with a decline of 8.6 percent, leaving total sales at €487.1 million for the year.

Overall, Kering’s strong revenue figures, despite its losses, can be largely owed to the Asia-Pacific region, and specifically mainland China sales, noted for optimistically robust sales figures across Yves Saint Laurent, Bottega Veneta, Qeelin, Boucheron, and Kering’s jewelry houses.

Looking forward, the Kering Group stated that it is focused on same-store revenue growth, strengthening the exclusivity of their distribution and developing cross-business growth platforms in e-commerce; from omni-channel distribution to innovative technological tools, expertise and infrastructure. An ambitious agenda, to be sure, but one needed to meet the challenges of a world slowly emerging from global lockdowns and a new normal — whatever that may be.


Earnings Brief