Luxury and sportswear group Kering just announced its 2015 financial results and one thing is certain — people are loving Gucci once more.
Kering said in its results statement that revenue in the fourth quarter jumped 16%, mainly because of the resurgence in popularity for its Gucci brand. Gucci sales rose 13% in the fourth quarter.
This is a pretty big deal for Kering because Gucci accounts for nearly two-thirds of its profit.
Kering also owns other brands such as Bottega Veneta and Yves Saint Laurent but Gucci was its star performer, here’s Kering’s statement (emphasis ours):
Gucci saw a return to growth in 2015, with a progressive increase in sales on a comparable basis driven by directly operated stores in mature and emerging markets.
The brand’s new creative vision — which has been enthusiastically received by the trade press and customers alike — coupled with the rapid roll-out of the brand’s new strategy from the first half of the year, provided fresh impetus and drove solid, promising performances in the fourth quarter of the year.
Overall, in 2015, Kering said sales rose by 15.4% to €11.5 billion (£8.9 billion, $12.8 billion) from the previous year. This is pretty mean feat, considering Kering’s brands are exposed to Hong Kong and Macau where “poor market conditions” affected the group.
Basically the huge anti-corruption and anti-extravagance campaign led by President Xi Jinping, has transformed China’s burgeoning luxury goods sector forever. Luxury goods have become less accessible to the growing Chinese middle class, and less acceptable for members of China’s elite.
Bain & Company’s 2014 China Luxury Market Study, which was released at the beginning of last year, showed how China’s luxury goods industry now accounts for 29% of the global market. So all-in-all being able to grow a luxury brand in this environment, when they all face a hit from a key consumer sector, is a big deal.
“These results come amid a more complex economic and geopolitical environment, accentuating the shifts taking place in our sector,” said François-Henri Pinault, Chairman and CEO of Kering in a statement. “We are entering a new phase in our growth: we are perfectly positioned to leverage the strength of our brands and maximise value creation over the long term.
“We are closely monitoring resource and capital allocation in order to bolster returns. I am confident that the work of our creative teams and the commitment of all our associates will enable us to extend our growth trajectory in 2016 and beyond.”
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