Kering, the renowned French luxury group behind iconic brands like Gucci, Saint Laurent, and Balenciaga, has announced impressive financial performance for 2021. All of Kering’s brands experienced sales growth that surpassed pre-pandemic levels in 2019. The announcement was made by CEO François-Henri Pinault during a presentation of the group’s annual results and a press conference held in Paris.

According to Jean-Marc Duplaix, the CFO of Kering, the group’s online sales tripled between 2019 and 2020, reaching over €2 billion out of a total sales revenue of €17.6 billion. One standout among Kering’s portfolio was Bottega Veneta, which achieved a remarkable 32% growth compared to 2019, generating over €1.5 billion in just two years. Other brands under Kering, such as Balenciaga, Alexander McQueen, and Qeelin, also contributed to the group’s success by achieving profitable and sustainable growth, adding an additional €1 billion in sales compared to 2020.

François-Henri Pinault emphasized several key factors that contributed to Kering’s success. One of them was the strategic rebalancing of product portfolios across all brands. Pinault expressed satisfaction with the group’s average annual growth rate of 18% over the past five years, which is significantly higher than the market average. Kering’s fashion houses have become increasingly desirable and have successfully attracted new customers, especially in the higher-end product categories.

Pinault highlighted the strategic focus on luxury and higher-end products within Gucci, Saint Laurent, and Balenciaga as a driving force behind Kering’s success. This shift has resulted in an increase in the average selling prices across all product categories. Pinault stressed that luxury brands must continually work on exclusivity and desirability to maintain their market position. However, he also acknowledged the potential danger of luxury products becoming too commonplace.

Brand value was another important aspect discussed by Pinault, who mentioned that luxury is an economic equation that balances volume sold and the value of products. Kering ensures that volume does not exceed a 20% increase to maintain brand integrity. Pinault also expressed optimism about retaining the younger clientele that Kering has attracted through an emphasis on creativity in ready-to-wear. He believes that this customer base will provide a solid foundation for the group’s future growth as they age.

Pinault sees significant growth opportunities in expanding the men’s lines within Kering’s brands. With the men’s fashion market experiencing substantial growth in recent years, Pinault expressed confidence in Gucci and Saint Laurent’s ability to further develop their menswear offerings. Balenciaga has already found success in this market, and rebalancing menswear and womenswear within these brands could drive further growth for Kering.

The discussion also touched on Kering’s distribution strategy. Pinault revealed that direct sales now make up 81% of the group’s total sales, with Gucci reaching an impressive 91%. To ensure brand exclusivity and desirability in the long term, Kering has reduced its wholesale operations at brands like Saint Laurent, Bottega Veneta, and Balenciaga. Instead, the focus has shifted to opening stores and expanding direct distribution networks, particularly in mid-sized cities in the United States. This move allows Kering to have better control over brand perception, prices, and inventory.

Pinault also acknowledged the potential of Web3 and the Metaverse for the luxury industry. To explore these technologies and their potential applications, Kering has established an innovation lab within the group. Pinault emphasized the group’s proactive and responsive approach, taking a “test & learn” stance rather than a “wait & see” attitude. He highlighted the impact of Web3 on data ownership and its potential to disrupt customer relationship management and e-commerce. Pinault also mentioned the possibility of accepting cryptocurrency payments on Kering’s websites, although legal and tax considerations need to be taken into account.

Pinault discussed the three stages of digital opportunities for luxury brands, which involve extending what is done in the physical world, creating exclusive virtual products, and exploring smart contracts and new services. He believes that digital sales could reach 30-35% globally, potentially even higher with further development of Web3 and virtual products and services.

In conclusion, François-Henri Pinault’s analysis of Kering’s financial performance and strategic outlook demonstrates the group’s commitment to sustained growth, luxury exclusivity, and embracing emerging trends. With strong sales results, a focus on luxury and menswear offerings, and a proactive approach to digital innovation, Kering is well-positioned for continued success in the luxury industry.

Useful Links:

– [Kering’s Official Website](https://www.kering.com/en)
– [Kering’s Annual Report](https://www.kering.com/sites/default/files/kering_reports/en_kering-2020_rapport-activite.pdf)