Entering 2024, luxury sales are suddenly "cold". LVMH, the world's largest luxury goods group, released its first-quarter financial report, showing that overall sales fell 2% in real exchange terms, of which the revenue of LV and Dior's fashion and leather goods division fell 2% to 10.49 billion euros, the worst performance in nearly two years.
Kering was not spared, with sales of 4.504 billion euros in the first quarter, down 11% year-on-year. Gucci's revenue plunged 21% year-on-year to 2.079 billion euros, while the comparable revenue of the direct and wholesale channels fell 19% and 7%, respectively, while Saint Laurent and Bottega Veneta contributed 740 million euros and 388 million euros, respectively, down 8% and 2% year-on-year, respectively, and the "other brands" including Balenciaga and Alexander McQueen"The sector is down 7 percent.
Source: Xinhua News Agency
In fact, Kering's performance last year was a bit bad, recording revenue of 19.566 billion euros (about 152 billion yuan) and net profit of 2.983 billion euros, down 4% and 17% year-on-year respectively. Gucci's revenue was 9.873 billion euros, down 6% year-on-year.
Due to the cooling of the luxury industry and the need for continuous capital investment in the transformation of its brands, the group does not expect to see a significant improvement in performance in the short term, and operating profit may fall by 40% to 45% in the first half of 2024, far exceeding analysts' previous forecast of a decline of 24% to 30%.
According to public information, Kering Group (Kering) is the world's second largest luxury group, established for 61 years, headquartered in Paris, France, its products cover clothing, accessories, jewelry, leather goods, watches, cosmetics, perfumes and other categories, business in more than 120 countries and regions. The wealth of François Pinault and his family reached 31.6 billion US dollars (about 228 billion yuan), ranking 54th on the "2024 Forbes Global Billionaires List".
Back in 1963, François Pinault founded the Pinault company, which was first engaged in the import and sale of timber and building materials, and with the development of the business, it began to acquire upstream and downstream enterprises, first wood manufacturing enterprises, and then paper enterprises. By the end of the 80s, it had grown into an important manufacturer and marketer of timber and building materials, spanning both industrial and retail sectors.
At this time, Pinot was faced with a strategic choice: either to become a giant in the wood and paper industry, or to transform. After some weighing, considering the large demand for papermaking equipment and the huge consumption potential in Europe, it was decided to expand the retail industry, and successively acquired Printemps and the mail-order company La Redoute to form the Pinault-Printemps-Redoute (PPR Group).
François-Henri Pinault
At the end of the 90s, LVMH acquired a 34.4% stake in Gucci for $1.4 billion in just 20 days. When Gucci reacted, it found that its former rival had become its majority shareholder, and offered LVMH to buy the company entirely. The result was rejected by Bernard Arnault, who wanted to take Gucci at the lowest cost.
In order to be able to operate independently, Gucci's management sold a 42% stake to PPR Group for $3 billion, making it the largest shareholder, thereby diluting LVMH's stake to 20%. After two years of tug-of-war, Bernard Arnault finally agreed to transfer his stake to PPR.
In the process of acquiring Gucci, PPR also acquired luxury brands such as YSL, Balenciaga, and Alexander McQueen, becoming a luxury giant on a par with LVMH and Richemont. No one expected that Arnault's stealing of chickens would not result in a loss of rice and create a strong opponent. Today, Gucci contributes about half of the Group's sales and more than two-thirds of its profits.
In '05, François-Henri Pinault succeeded his father as CEO of PPR Group. After taking over, he accelerated the pace of divestment of the retail business, selling retail businesses such as Printemp Department Store, and also selling off the timber and electrical manufacturing industries that he had started. This was followed by the acquisition of the sports brand Puma for 5.3 billion euros, forming two business segments: luxury goods and sports, leisure and lifestyle products. In 2013, the group announced that it would change its name to Kering, and the Chinese name "Kering" means "sky and clouds, dreams without boundaries".
The Asia-Pacific region, where China is located, excluding Japan, is Kering's largest market, with revenues of 6.848 billion euros, or 35 percent, last year. Among them, as outbound travel continues to recover, the performance of China region increased by 35% in the fourth quarter of 2023 and 34% in the full-year performance.
However, in the first quarter of this year, sales in the Asia-Pacific market declined, resulting in a decline in Gucci's performance. Armelle Poulou, chief financial officer of Kering, said bluntly that Gucci's sales performance in the Chinese market is worrying. Some industry insiders believe that China is still the world's largest luxury market, attracting the attention of various brands and companies, and the competition will be more intense. Increasing the attractiveness and scarcity of its brands is undoubtedly the most important thing for Kering right now.
Write at the end
In addition to Kering, the François Pinault family owns France's largest bookstore chain, FNAC, Focus magazine, Château Latour, and is the largest shareholder of France 1 and Christie's, with three private galleries and a collection of more than 5,000 works of art.
It is worth mentioning that at the end of April 2013, the Pinault family bought the bronze statues of rat and rabbit heads in the Old Summer Palace from the original owners of the cultural relics. On June 28, the two cultural relics, which have been adrift overseas for more than 150 years, were donated to China. François-Henri Pinault said that a family business should actively fulfill its corporate social responsibility, and the return of the head of the beast is precisely out of this sense of social responsibility.