KERING'S REVENUE DROPPED NEARLY 30 PERCENT IN 2020'S FIRST HALF

Gucci’s revenue took the biggest hit.

By Balthazar Malevolent

KERING'S REVENUE DROPPED NEARLY 30 PERCENT IN 2020'S FIRST HALF

In the same way as its direct competitor LVMH, Kering has been affected by the current coronavirus pandemic, though both luxury conglomerates boast resilience in their financial half-year results. However, Kering was hit slightly harder than LVMH, with sales falling by an unadjusted 29.7 percent (compared to the 27 percent decline in LVMH). 

The consolidated revenue of €5.3 billion (around $6.3 billion USD) is approximately a third less than Kering's previous year's reported revenue but its operating margin remains "resilient" at 17.7 percent, Kering reports. Shop closings and stopped tourism played a major role in subverting Kering's fortunes, as they did with LVMH, and the resulting post-pandemic reopening worked in Kering's favor as well. 

While sales from directly operated stores shrank by almost 31 percent — Kering's total revenue decreased by an estimated 43.4 percent due to closure in particular in Q2 2020. Online sales rocketed 47.2 percent, however, boosting the figures of Kering during global quarantines. Asia, particularly China, has played a particularly important part in the gradual recovery of Kering. 

Gucci, arguably Kering's crown jewel, is a reflection of Kering's difficult year. It enjoyed a "robust" beginning in 2020, but saw sales fall over EUR 3 billion (around USD 3.6 billion) in the first six months of 2020, down 33.5 percent from 2019 (EUR 4.6 billion or about USD 5.4 billion). Kering records "favorable traction with local customers in its main markets" as Gucci stores continue to reopen, boosting the brand's online sales by a remarkable 51.8 percent, following a 36.1 percent drop in wholesale revenue. 

Ironically, only Gucci, Yves Saint Laurent (revenue down 30%) and Bottega Veneta (revenue down 8.4%) are being supplied by specific finances from Kering. As for Alexander McQueen and Balenciaga, Kering's only note is that the houses "held firm" and reduced declining revenue due to "the appeal of their innovative offering." Kering's "other houses" (i.e. those not Gucci, Saint Laurent or Bottega Veneta) brought in €919.1 million (about $1.07 billion) with revenue down by 25 percent. 

Kering's main brands continue to innovate in gendered fashion, even in the face of a global pandemic: Gucci has recently launched its first non-binary collection, and Bottega Veneta has launched a masculinity-questioning line.

In other news, Adidas and Yohji Yamamoto‘s long-running Y-3 label is expected to present its FW20 footwear collection in the coming weeks, and one of the main pieces is a new style called the Hicho. A platform take on adidas Originals‘ iconic Campus, the Hicho serves as Y-3's court shoe for the autumn season, elevating a classical style both figuratively and literally for a completely innovative look.

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