Kering announced a beauty deal with L’Oréal on Sunday, which “represents a major step forward”, Kering COO Jean-Marc Duplaix told analysts during Wednesday’s earnings call. “The rationale was not driven by the deleveraging situation that we have,” Duplaix said, calling the deal a “win-win”. Another recent decision was the postponement of the Valentino deal.
The group attributed Gucci’s “sharp sequential improvement compared to the second quarter to a stronger momentum in North America and Western Europe, along with the success of new products, particularly leather goods”.
Sales at Saint Laurent fell 4 per cent, versus a 10 per cent decline in Q2, which was credited to renewed growth in North America, as well as ready-to-wear. Kering noted that the house saw double-digit growth in ready-to-wear and shoes. The other houses division, including Balenciaga and Alexander McQueen, returned to growth, posting a 1 per cent uplift. That was notably due to Balenciaga’s performance in the US and double-digit growth in jewellery (the group’s jewellery brands include Boucheron, Pomellato and Qeelin). Sales at Bottega Veneta were up 3 per cent, while the eyewear and “corporate” division was up 6 per cent.
By region, Kering retail sales in North America grew 3 per cent in the third quarter, Western Europe was down 7 per cent, Asia-Pacific declined 10 per cent, excluding Japan, which was down 16 per cent, and the rest of the world up 2 per cent.
Analysts had anticipated modest growth across third-quarter luxury earnings, supported by the US wealth effect and a stabilisation in China. So far, predictions have been accurate. LVMH’s fashion and leather goods division reported a sales decrease of 2 per cent in Q3, an improvement compared with a 9 per cent decrease in Q2. Hermès sales were up 9.6 per cent, experiencing slightly increased momentum compared to the first half of the year. Brunello Cucinelli posted a 12 per cent revenue increase. Prada is to report its earnings on 23 October, Moncler on 28 October and Richemont on 14 November.