Revenues at luxury group Kering leapt by 25% on a reported basis in 2017 and 27.2% on a comparable basis, thanks in part to a performance from Gucci that was “nothing short of spectacular”.
Total consolidated revenue for the year reached €15.5bn while recurring operating income hit €2.9bn, up 56.3%, and operating margin achieved a “very sharp rise” reaching 19%.
François-Henri Pinault, Chairman and CEO, hailed 2017 as “a phenomenal year”. “We created over €3bn in additional revenues in a single year, and generated more than a billion in additional EBIT. Gucci, whose performance was nothing short of spectacular, is amplifying its desirability across all markets. Saint Laurent is on a rapid growth track, while Bottega Veneta pursues its redeployment. Balenciaga is charting an impressive development trajectory, and our other Luxury brands are experiencing positive momentum,” he said.
Gucci, which is headed up by creative director Alessandro Michele who transformed the brand with his maximalist designs, achieved an almost 42% increase in revenues to €6.2bn while recurring operating income soared by almost 70% to €2.1bn.
The business posted strong sales across all channels. Sales in directly operated stores were 47% higher year on year, with an even more impressive showing in Western Europe (up 57.6% on a comparable basis) and North America (up 43.9% on a comparable basis). Online sales soared by more than 80%, while sales in the wholesale network were up 34.7% on a comparable basis.
Saint Laurent, headed by Anthony Vaccarello, posted revenue up 23% at €1.5bn and recurring operating income up 40% at €376.9m. Bottega Veneta revenue was broadly flat at €1.2bn (up 0.2%) while recurring operating income was down slightly at €294m. Other luxury brands, which include Balenciaga, were up 14% at €1.9bn with recurring operating income of €116m (up 1.9%).
Revenue for the Sport & Lifestyle activities totalled €4.4bn, a rise of 12.8% as reported and 14.7% on a comparable basis. This sector is largely comprised of Puma, which delivered €4.1bn in revenue, up 15.8%. However Kering has previously announced its intention to dispose of the majority of its stake in Puma and focus on its luxury activities.
“Earlier this year, we announced the completion of our transformation into a Luxury pure player. Pending their approval, the distribution to our shareholders of the bulk of Kering’s stake in Puma will allow them to directly benefit from the considerable potential of this brand, which is in the early days of its growth story,” Pinault said.