During the first half of the year, the net profit of the owner of Gucci and Yves Saint Laurent fell 53% year on year.
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The luxury group Kering saw its activity strongly affected by the coronavirus pandemic in the first half of the year, but reported on Tuesday an “encouraging recovery”, especially in Asia-Pacific, its key market, thanks to the gradual reopening of its stores.
“The first half of 2020 will undoubtedly remain the most complex period we have been confronted with,” summarized CEO François-Henri Pinault, quoted in a press release.
During the first half of the year, the net profit of Kering – which owns the brands Gucci, Yves Saint Laurent, Bottega Veneta and Balenciaga- fell 53% over one year, to 272 million euros.
As a reminder, the group benefited from a favorable basis of comparison: during the first six months of 2019, its net profit had plunged to 579 million euros – against 2.3 billion a year earlier – mainly due to a record tax adjustment in Italy linked to its Gucci brand (1.25 billion euros).
On Tuesday, Kering also said its sales fell 43% for the second quarter alone, the most affected, to 2.17 billion euros. Over the half-year as a whole, sales are down 29.6%.
Gucci, its flagship brand, saw its sales fall by 33% over the first half, while remaining a huge contributor for the group with 3 billion euros in turnover alone.
While it does not give any figures for the second part of the year, Kering reports an “encouraging recovery as stores reopen, particularly in Asia-Pacific, driven by mainland China”, a key market for its brands.
“Kering has held up well, our results are solid,” said CFO Jean-Marc Duplaix during a conference call.
“The solidity of our model has enabled us to approach this crisis from a position of strength and to weather it so far with great resilience. We remain confident in our ability to return to growth as soon as the market environment improves, ”he said.
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