Modest revenue growth for Kering as it reorganizes luxury division
French luxury group Kering reports revenue growth of 1.2 percent to 2.4 billion euros ($3.32 billion) in the first quarter of 2014. Luxury sales advanced 6.3 percent, excluding acquisitions and currency fluctuations.
Sales at Gucci, Kering’s biggest brand, rose 0.3 percent in the quarter on a comparable basis. Gucci is introducing more expensive products and upgrading stores as it seeks to win back customers, who are switching to brands they perceive to be more exclusive. Sales are “still negative” in mainland China, though trends are “improving,” Kering Chief Financial Officer Jean-Marc Duplaix said on a conference call.
Quarterly revenue rose fastest at Saint Laurent, increasing 27 percent, exceeding analysts’ estimates for 18 percent growth. Ready-to-wear and leather-goods growth at the brand was “outstanding,” Kering said.
Alexis Babeau, managing director of Kering’s luxury unit since 2011, will leave the company “to take his career in a new direction,”. Starting next month, his role will be split into two, with Marco Bizzarri overseeing couture and leather-goods brands, excluding Gucci, and former LVMH executive Albert Bensoussan heading watches and jewelry.
Bizzarri will continue to lead handbag maker Bottega Veneta until a replacement is found, while Gucci CEO Patrizio di Marco will report directly to Pinault. Pinault will remain chairman of the Saint Laurent brand, which is “at a pivotal moment,” Kering also said.
The changes won’t affect Kering’s strategy, which is focused on organic growth, group Managing Director Jean-Francois Palus said on a conference call. Kering won’t acquire more sporting and lifestyle brands until it has turned round Puma SE, Pinault said in an April 10 interview.