With Kering and LVMH announcing abysmal financial results, it follows that the coronavirus pandemic would strike their fellow luxury groups hard. Indeed, Prada Group reported a remarkable loss due to closures of the stores, declining travel and decreased wholesale, reporting a 40 percent fall in net sales, down to EUR 938 million (around US$ 1.1 billion). 

Unlike its rivals, Prada Group — which owns Prada, Miu Miu, and Church — fosters resilience during these difficult times, emphasizing diminished retail and buoyant e-commerce, which witnessed a 32 percent decline and "triple-digit sales growth during and after the lockdowns," respectively. The statement by the Company also highlighted its "disciplined approach" to cost control and efficient supply chain management as key factors to reduce losses, realized through lease renegotiation and a tightened marketing budget. 

In response to the outbreak, Prada closed 70 percent of its outlets, slicing wholesale by a whopping 71 percent, a drastic step from which the brand is only just beginning to recover. Unsurprisingly, the "whole Asia Pacific zone" has lifted Prada's fortunes as the country loosens its lockdowns, reportedly enjoying double-digit revenue growth in the month of June, the final month of the first half of 2020. Europe and Japan, too, are seeing a bounceback. 

"I'm incredibly proud of the dedication and sense of duty displayed by all our people in these circumstances," said Patrizio Bertelli, CEO of Prada Group, in a statement. "The first half of 2020 saw a temporary interruption of our growth trajectory which, in a situation of progressive pandemic management, we are sure will slowly resume as of the second half of 2020, when our store network will be completely operational again."

In other news, Adidas and Yohji Yamamoto have reunited for the second "YY EXCLUSIVE" launch following the debut of the sub-label last summer. The sub-label is distinct from Y-3, which mainly sees Yamamoto upgrading adidas classics, which is true for the latest collection of footwear and apparel.

The luxury house brought in less than a billion euros thus far in 2020.

CORONAVIRUS: PRADA REVENUE SUFFERED 40% DECLINE

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.

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

Kering has approved the appointment to its board of three new directors. The French luxury goods behemoth has announced the arrival of actress Emma Watson, businessman Tidjane Thiam, and entrepreneur Jean Liu to its board of directors, after their names were proposed to the group on 12th March. 

"The mutual wisdom that comes from a range of backgrounds and the diversity of interactions are critical to our organization's future. I am proud to add these outstanding talents to the squad," said François-Henri Pinault, CEO and Chairman of Kering, in his statement. 

Watson will also act as Chair of the Committee of Sustainability. While best known for her role as Hermione Granger in adaptations of the Harry Potter film and parts in movies like Little Women, in recent years she has turned her attention to activism on issues related to the environment and women's rights. Since 2014, she has been a UN WOMEN Global Goodwill Ambassador, and has edited a sustainable fashion issue of Vogue Australia. Watson also spoke recently in support of trans rights after Harry Potter author J.K. Rowling made transphobic comments.

Kering appointed Thiam to preside over the Audit Committee. Formerly CEO of Credit Suisse Group AG, the French-Ivorian banker is currently serving as the Special Envoy of the African Union on COVID-19, and is a member of the International Olympic Committee. 

Liu is president of Beijing-based transportation company Didi Chuxing, and through DiDi Women's Network has advocated the empowerment of women in tech. Liu also serves as a founding member of the Bloomberg New Economy Forum advisory board, and is an active member of the board of trustees of the Asia Society. 

Kering, which owns brands such as Gucci and Balenciaga, has contributed around $1 million USD in recent months to counter coronavirus spread. Because of COVID-19, it reported a 15.4 percent drop in revenue for Q1 2020 in April.

Do you think Rick Owens, Mugler, Victoria Beckham or Alexander Wang Houses are going to have big nameы on Board of Directors this year? We will keep you updated, stay tuned!

KERING ADDED EMMA WATSON TO BOARD OF DIRECTORS

Kering has made a commitment that the group’s Houses will only hire models aged over 18 to represent adults at their fashion shows and photo sessions, as of 2020 (fall-winter 2020/2021 fashion shows).

“As a global Luxury group, we are conscious of the influence exerted on younger generations in particular by the images produced by our Houses. We believe that we have a responsibility to put forward the best possible practices in the Luxury sector, and we hope to create a movement that will encourage others to follow suit,” declared François-Henri Pinault, Chairman and Chief Executive Officer of Kering.

The charter on the working relations and well-being of models drawn up by Kering and LVMH in 2017 has already led to progress in the Luxury sector, notably by introducing a minimum age of 16 for models. This new step signals further growth in Kering’s continued commitment to women. “In our view, the physiological and psychological maturity of models aged over 18 seems more appropriate to the rhythm and demands that are involved in this profession. We are also aware of the role-model element that images produced by our Houses can represent for certain groups of people,” declared Marie-Claire Daveu, Chief Sustainability Officer and Head of International Institutional Affairs at Kering.

In September 2017, Kering and LVMH published a charter on the working relations and well-being of models. Its principal commitments included:

• The obligation to work only with models in possession of a valid medical certificate, issued within the previous six months and certifying their good health

• The banning of size 32 for women and size 34 for men from casting requirements

• Minimum age of 16 for models representing adults

• The application of specific rules for the working conditions of models aged 16 to 18

• The option for models to make a direct complaint in the case of a dispute with a model agency, a casting director or a brand

• The introduction of numerous advances in working conditions, such as access to a “reserved area” where they can change conveniently and the availability of food and drink that are suited to their dietary needs.

Kering S. A. is a French multinational corporation and conglomerate headquartered in Paris, France, specializing in luxury goods such as jewelry, watches, designer bags, shoes, and clothing. The luxury brands owned by the group include Gucci, Yves Saint Laurent, Balenciaga, Alexander McQueen, Bottega Veneta, Boucheron, Brioni, Pomellato, and Ulysse Nardin.

The company was founded in 1963 by François Pinault. Pinault S.A. was quoted on Euronext Paris in 1988 and has been a constituent of the CAC 40 index since 1995. It changed its name to Pinault-Printemps-Redoute (PPR) in 1994 before adopting its current name in 2014. François-Henri Pinault has been Chairman and CEO of the group since 2005.

The Kering Foundation is committed to defending women’s dignity and rights by combating violence against women and promoting women’s empowerment. Since 2009, the Foundation initiated 47 partnerships with NGOs and supported many social projects oriented towards women’s rights. Many brands have philanthropic projects with the support of the Kering Foundation. Gucci launched its project Chime for Change, an international campaign to raise funds for women’s emancipation, focusing on education, health, and justice. Every year since 2012, the Kering Foundation has contributed to the International Day for the Elimination of Violence against Women with the White Ribbon for Women campaign. The 2018 campaign focused on gender-based cyberbullying. In 2019, for its 10th anniversary, the annual budget of the Foundation was doubled to $2 million.

KERING COMMITS TO WORKING ONLY WITH MODELS AGED OVER 18

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