Kering Looks to Yves Saint Laurent to Reduce Reliance on Gucci
Kering SA
KER -1.53%
plans to double revenues at fashion house Yves Saint Laurent and at its eyewear division, as the French luxury group looks to reduce its reliance on star brand Gucci.
Sales at Yves Saint Laurent would reach €5 billion, equivalent to about $5.4 billion, and eyewear sales would hit €2 billion in the medium term, under plans set out by the company during investor presentations in Paris on Wednesday and Thursday.
Slowing growth at Gucci, the biggest brand in Kering’s portfolio, has put pressure on the company to diversify and boost revenues from other sources, according to analysts. Gucci revenues grew by around 13% year-over-year in the first quarter of 2022, underperforming Kering as a whole, which grew 21%.
Recent Covid-19 related lockdowns in China, where Gucci has relatively high exposure, have further highlighted Kering’s vulnerability to any problems affecting the brand.
Kering Chief Executive
Francois-Henri Pinault
has previously said he would like to expand the company through acquisitions, but few if any attractive brands capable of transforming the group are seemingly up for sale, analysts say.
Kering reported sales of €17.6 billion last year, 13% higher than in prepandemic 2019. Gucci contributed 55% of those revenues, far more than the group’s other luxury brands, which also include Balenciaga and Bottega Veneta.
Meanwhile, Kering has fallen further behind industry leader
LVMH Moët Hennessy Louis Vuitton SA,
whose revenues grew 20% last year relative to 2019 to €64.2 billion.
To increase sales at Yves Saint Laurent, Kering’s second-largest brand, the company told investors it would roll out new stores, especially in the U.S., to help the label reach new customers. Globally, the brand will increase its number of stores from 267 today to between 300 and 350 in the medium term, the company said.
New store openings would help the brand rebalance toward selling to local consumers rather than focusing chiefly on tourists, Kering said.
Eyewear is another business that Kering said was poised for rapid growth. The group acquired Danish eyewear company Lindberg A/S last year, and announced plans to buy U.S. brand Maui Jim earlier this year.
Still, Gucci can continue to grow, Kering told investors, stating a “medium-term ambition” for the brand to achieve revenues of €15 billion, up from last year’s €9.7 billion.
Growth at Gucci could be achieved by appealing to more male customers, boosting the brand’s appeal to a new generation of young luxury consumers, and enhancing the brand’s sales network in the U.S. and Europe, the company said.
Write to Trefor Moss at [email protected]
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
Kering SA
KER -1.53%
plans to double revenues at fashion house Yves Saint Laurent and at its eyewear division, as the French luxury group looks to reduce its reliance on star brand Gucci.
Sales at Yves Saint Laurent would reach €5 billion, equivalent to about $5.4 billion, and eyewear sales would hit €2 billion in the medium term, under plans set out by the company during investor presentations in Paris on Wednesday and Thursday.
Slowing growth at Gucci, the biggest brand in Kering’s portfolio, has put pressure on the company to diversify and boost revenues from other sources, according to analysts. Gucci revenues grew by around 13% year-over-year in the first quarter of 2022, underperforming Kering as a whole, which grew 21%.
Recent Covid-19 related lockdowns in China, where Gucci has relatively high exposure, have further highlighted Kering’s vulnerability to any problems affecting the brand.
Kering Chief Executive
Francois-Henri Pinault
has previously said he would like to expand the company through acquisitions, but few if any attractive brands capable of transforming the group are seemingly up for sale, analysts say.
Kering reported sales of €17.6 billion last year, 13% higher than in prepandemic 2019. Gucci contributed 55% of those revenues, far more than the group’s other luxury brands, which also include Balenciaga and Bottega Veneta.
Meanwhile, Kering has fallen further behind industry leader
LVMH Moët Hennessy Louis Vuitton SA,
whose revenues grew 20% last year relative to 2019 to €64.2 billion.
To increase sales at Yves Saint Laurent, Kering’s second-largest brand, the company told investors it would roll out new stores, especially in the U.S., to help the label reach new customers. Globally, the brand will increase its number of stores from 267 today to between 300 and 350 in the medium term, the company said.
New store openings would help the brand rebalance toward selling to local consumers rather than focusing chiefly on tourists, Kering said.
Eyewear is another business that Kering said was poised for rapid growth. The group acquired Danish eyewear company Lindberg A/S last year, and announced plans to buy U.S. brand Maui Jim earlier this year.
Still, Gucci can continue to grow, Kering told investors, stating a “medium-term ambition” for the brand to achieve revenues of €15 billion, up from last year’s €9.7 billion.
Growth at Gucci could be achieved by appealing to more male customers, boosting the brand’s appeal to a new generation of young luxury consumers, and enhancing the brand’s sales network in the U.S. and Europe, the company said.
Write to Trefor Moss at [email protected]
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
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