Kering is a fashion industry powerhouse, but their most recent sales figures show a slight lag behind their competitors. Despite the growth of 1%, the luxury giant’s performance still struggles to keep up with their rivals. What does this mean for their future? Read on to find out.
1. Kering Debuts Positive Sales Figures
Kering, one of the most renowned fashion conglomerates, has just released its latest report on sales figures, and the news looks nothing but positive. The luxury brand, who owns Gucci, Saint Laurent, Boucheron, and Pomellato, among others, had very positive results to show for its third quarter of the year.
The figures projected an overall 4.7% increase in sales compared to the same quarter of the year, with the company’s portfolio of luxury brands performing above expectation. Gucci and Yves Saint Laurent, in particular, experienced remarkable growth of 11.9% and 7.3% respectively compared to the previous year. Other highlights of the report included:
- Directly operated stores saw a 5.7% increase in sales
- Online sales saw a 13.5% increase compared to last year
- Japan, China, and the US contributed strongly to the sales
The news of the strong sales figures has been well received by many, inspiring further optimism for the future of Kering.
2. Kering Outpaces Industry Average
Kering Stock Upbeat After Q1 2020 Results
The international luxury fashion conglomerate Kering recently released its Q1 financial results, affirming a 5% increase in sales from the previous year and a 12.1% increase in profits. Reaching 1.42 euros in earnings per share, the results reveal Kering’s major success amidst the current coronavirus turmoil, significantly outperforming its peers.
The company seemed to come out unscathed, having only experienced a minimal 0.5% decrease in operating profits compared to last year. One of the factors behind this success may be the company’s unique approach to digital transformation in the wake of the pandemic. Kering was one of the first luxury conglomerates to deliver an online-first strategy, and this paid off with strong double-digits growth in online retail and digitalization.
Kering’s strong performance has created optimism amongst investors, and the stock has been growingly ever since the results were released. Showing a market capitalization of 70 billion euros and rising, the company’s Q1 results instill assurance that Kering will continue to outperform industry standards in the luxury market.
3. How Kering Achieved its Success
Kering’s success story begins with the core beliefs of the brand and the hard work of their team. The luxury apparel brand houses several fashion lines under its umbrella, including Gucci, Saint Laurent, Balenciaga, Boucheron and Bottega Veneta. Each of them plays an integral part in the company’s success.
Firstly, the vision and leadership of Kering is what has enabled them to remain at the top. Chairman and CEO Francois-Henri Pinault has been instrumental in driving the company forward with a clear strategy, focusing on putting luxury first and taking the necessary steps to invest in the right projects. The team behind the scenes, too, has been crucial in pushing the brand ahead.
- Dynamic Management: Kering’s business model is backed by a dynamic management team, who are proactive in taking the initiative and pursuing creative partnerships. This is one of the key driving forces behind Kering’s success.
- Focus On Quality: Kering has its finger firmly on the pulse of quality, innovation and sustainability. By pushing for next-gen apparel, the brand has stayed relevant to a younger, digital-savvy audience who appreciate their modern take on style and design.
- Global Vision: Kering has embraced the opportunity to go global, by expanding its presence around the world. It has invested heavily in research and development, so it can always continue to stay ahead of the competition.
This 360-approach is why Kering has achieved such tremendous success and is a go-to name for luxury clothing worldwide.
4. Perspectives on Kering’s Growth
It’s no surprise that Kering rides the wave of growth expectations, not only because of their acquired brands, but also because of how they actively pursue sustainability initiatives. With the addition of well known luxury brands, Kering has a unique strategic advantage that allows it to remain competitive in the changing fashion industry.
The long-term vision and ambition of Kering also promise to help the company thrive in a post-pandemic world. Their vertical integration and commitment to social responsibility, along with their focus on emerging markets, will ensure the company remains in a strong position to expand and adjust strategies in order to meet future market needs.
- Vertical Integration – Kering’s vertical integration, whereby each vertically integrated business focuses on a specific market, provides structure and clarity to the direction and resources of all of the brands.
- Sustainability – Kering is one of the first companies to focus on sustainability with their partnerships and initiatives that are designed to reduce environmental impact.
- Emerging Markets – Kering has the foresight to invest in and design a roadmap in the emerging markets, like China, India, and the Middle East, to ensure long-term success.
By considering their long-term goals, prospects, and proactive approach to sustainability, Kering is well-positioned to continue to maximize its growth potential. Kering has shown that they can maintain their pace while competing with larger and more established players in the market. Even as their sales have edged up by 1%, this is a sign that Kering’s strategy of staying true to its legacy is a successful way to tackle current and future competition. With the correct investments in technology and a commitment to brand identity, Kering has the potential to ride the wave of success in the fashion industry with their valued impact.
