Kering Sees ‘Solid Growth’ in Jewelry Sales in Q1

FinancialsApr 19, 2019

Kering Sees ‘Solid Growth’ in Jewelry Sales in Q1

Gucci was the star of the show overall, but Boucheron delivered a strong performance in the jewelry segment.

A pair of 18-karat gold and diamond “Flora” earrings from Kering-owned brand Gucci. Kering plans to introduce Gucci’s first high jewelry line in June.

Paris—Luxury titan Kering started off its fiscal year on a high note, reporting strong first quarter results as star brand Gucci continues to thrive.

Quarterly revenue totaled €3.79 billion ($4.26 billion), a 22 percent increase compared with €3.11 billion ($3.5 billion) in the previous first quarter.

Kering’s brand portfolio spans fashion, leather goods, watches and jewelry, and includes Gucci, Bottega Veneta, Saint Laurent, Balenciaga and Alexander McQueen.

“On top of very strong increases in the first quarter of last year, Gucci, Saint Laurent and our other houses all posted excellent revenue growth, fueled by the creativity of their offers and the innovativeness of their execution,” CEO François-Henri Pinault said.

The jewelry segment delivered “solid growth,” Kering said, with Boucheron leading the charge. The 160-year-old brand’s sales grew in all regions.

“The launch of the Jack de Boucheron line in the quarter further strengthens the house’s jewelry offerings, and the extensive coverage of the reopening of the Place Vendôme store supported its visibility far beyond Paris,” Chief Financial Officer Jean-Marc Duplaix said during the company’s earnings call.

Kering noted in its annual report in February that it has an investment plan underway to “reinforce the notoriety and presence of the brand” and has target openings in Asia in the works.

Strong retail trends were reported at Pomellato and DoDo as well as “continuous development” at Qeelin, its China-inspired brand.

In June, the company plans to launch the first high jewelry line for Gucci.

In the watch category, Kering said it will focus on selling current models and increasing its network of prime distributors.

New watch models debuted at the Salon International de la Haute Horlogerie (SIHH) in January were “very well-received,” the company said. Watches from Ulysse Nardin and Girard-Perregaux performed especially well, said Duplaix.

The company is working toward the two brands “sharing all manufacturing and support functions while they each retain their separate identities in the market,” he added.

Globally, Kering saw growth across all regions, including a 7 percent increase in North America, 30 percent in Asia- Pacific, 14 percent in Western Europe and a 12 percent increase in Japan.

The company touted its strong performance in Asia-Pacific, specifically in mainland China, at a time when other luxury retailers have struggled in the fight for Chinese tourist dollars.

Kering has high hopes for the year ahead, expecting sustained growth and improved cash flow generation in spite of the complex economic environment.

“The agility we have put at the heart

of our organization positions us well to continue achieving steady, sustainable and profitable growth,” Pinault said.

Prior to the release of its financials Wednesday, Kering and the Pinault family announced they were pledging €100 million to the rebuilding of Notre-Dame de Paris following the recent fire at the famed cathedral.
Lenore Fedowis the associate editor, news at National Jeweler, covering the retail beat and the business side of jewelry.

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