Kering SA keeps making it harder to reach its own high bar, with another quarter of runaway demand for Gucci fashions and handbags.
The luxury conglomerate said comparable sales rose 32 percent in the second quarter, to 3.3 billion euros ($4.3 billion). That was roughly in line with the estimate of analysts surveyed by Bloomberg News. Like French fashion rival LVMH, it’s benefiting from seemingly insatiable demand in China, while Gucci also raced ahead in North America.
“We have not at this stage seen a slowdown in demand from the Chinese client,” Kering Chief Financial Officer Jean-Marc Duplaix said on a call.
Growth at Gucci came in slightly below expectations in the latest three months, at 40 percent. That was less than the previous quarter’s 49 percent pace, but still a rate that most rivals can only envy. As the brand’s growth persists, it’s facing tougher year-on-year comparisons.
Kering knows the knockout growth at Gucci, fueled by creative director Alessandro Michele’s designs, can’t go on forever. So it has been disposing of non-luxury assets like Puma, which it spun off in May, to focus on higher-end fashion in the hope of pushing profit margins into the cash-cow territory of LVMH’s Louis Vuitton and Hermes International.
The weak link at Kering remains Bottega Veneta, where comparable sales fell 2.3 percent in the second quarter. Revenue has stagnated since 2015, and the company replaced creative director Tomas Maier earlier this summer.
In addition to the Puma spinoff, Kering has divested sportswear label Volcom as well as stakes in the contemporary designers Stella McCartney and Christopher Kane.
