Reporter | Chen Qirui
Edit | Lou Shuqin
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Kering Group, which owns brands such as Gucci, Saint Laurent and Bao Di Jia, recently released its 2021 performance report.
As of December 21, 2021, Kering reported sales of €17,645 million, an increase of 34.7% and 13% compared to 2020 and 2019, respectively. Operating profit and net profit increased by 60% and 70.4% compared to 2020, at EUR 5,017 million and EUR 3,361 million, respectively.
Kering performed strongly in the fourth quarter due to rising consumer demand for high-end products during the holiday season, with sales up 32% year-on-year to €5.41 billion. For comparison, Kering's revenue in the third quarter of 2021 recorded EUR 4,188 million, representing a year-on-year increase of 12.2%.
Gucci remains the main driver of Kering's revenue growth, growing 30.8% to €9.73 billion in 2021, up from €9.6 billion in the same period in 2019, officially returning to pre-pandemic levels. The performance exceeded analysts' expectations. Against the backdrop of a rapid recovery in the luxury industry, Gucci's revenue in the first half of 2021 remained below the same period in 2019, and revenue growth in the third quarter was only 3.8%.
But in the fourth quarter, Gucci sales revenue recorded 3.069 billion euros, an increase of 31.6%, second only to the second quarter of 86.1%. In addition to sales pulled by the holiday season, Gucci's increased marketing investment in the fourth quarter also paid off.
In November, Gucci hosted the "Gucci Love Parade" series in Los Angeles, which brought a lot of exposure to the brand. Subsequently, it announced a partnership with Xbox and China's emerging trend IP Marsper, attracting a new wave of consumers for the brand. And the interface fashion has also written before, the release of the movie "Gucci Family" has also brought a high flow of Gucci.
It is worth noting that unlike the practice of betting a lot of resources on young consumers after the resurgence in 2015, Gucci is now clearly interested in deepening the brand image. Fran ois-Henri Pinault, CEO of Kering, said at the earnings conference that Gucci's historical elements, classic handbags and craftsmanship will be further emphasized in future designs, and affirmed the significance of higher-priced products to drive sales.
But Fran ois-Henri Pinault also said that due to rising material, transportation and logistics costs, he could not give specific figures on the number and extent of future price adjustments for Kering's brands. Gucci is one of the brands with the most frequent price adjustments since the outbreak of the epidemic, and has made two price adjustments for products such as popular handbags in 2021 alone.
Saint Laurent is the best performing brand within the Kering Group. In 2021, Saint Laurent's sales revenue increased by 44.5% year-on-year to a record high of EUR 2,521 million. The European and Chinese markets contribute the vast majority of Saint Laurent's revenue. Kering pointed out in its earnings report that Saint Laurent's exposure among tourists is weaker than Gucci's. This means that even if international travel is restricted, local European consumers can still support the brand's sales.
Daniel Lee, the original creative director of Butterfly Home, announced his departure in November 2021, and he has brought the brand back to growth in just two years. Over the past year, The Company's sales revenue increased by 24.2% to EUR 1.5 billion. However, in the third and fourth quarters, growth rates fell significantly, at 8.9% and 13.7%, respectively. To some extent, this shows that the association between BaoDijia and consumers is weakening, and the pressure on new designers will be greater.
The "Other Brands" division continued its strong growth, with sales revenue increasing by 43.1% year-on-year to EUR 3,265 million. Kering highlighted that balenciaga and Alexander McQueen contained in this section are among the few luxury brands that will still record positive growth in 2020. Jewelry brands Qeelin and Boucheron are also outstanding, and Pomellato's sales have exceeded the level of 2019.
Earlier, Kering sold the Nardin and Girard-Perregaux brands and cashed out a stake in the sports brand Puma. Kering currently has a cash flow of 3.95 billion, which is enough to acquire small and medium-sized luxury brands. Fran ois-Henri Pinault also said that it will not reject new acquisitions, and will focus on the development of ready-to-wear, leather goods, accessories and jewelry in the future.