Kering confirmed the resilience of the luxury sector with a solid performance in the third quarter, and said it was confident that all key regions would continue to deliver growth despite global economic upheaval.
“The region enjoyed strong demand both from local clients and from a sharp rebound in sales to tourists, which nearly tripled year-over-year,” he reported. “Americans came back massively this summer.”continued to underperform versus the group’s other brands, although organic sales picked up pace in the third quarter. Revenues at the Italian label totaled 2.6 billion euros, up 9 percent on a like-for-like basis, following a 4 percent rise in the second quarter.
“In an increasingly complex environment, we maintain the required flexibility to support our profitability and sustain our investments in the long-term outlook of all our houses,first and foremost. We are as confident as ever in the potential and prospects of the group,” he added. In mainland China, COVID-19 lockdowns continued to weigh on business in the third quarter, with Gucci disproportionately impacted compared to the group’s other brands. Nonetheless, Duplaix believes that China will bounce back.
“To protect the trademark, it does imply at least some presence in the country, so we will measure what’s the best balance in terms of business decisions, but we don’t expect that we’ll be able to operate again in the country, short-term or mid-term,” said Duplaix. Kering’s share price has fallen by 35 percent since the start of the year against the backdrop of looming recession, surging inflation, supply chain disruptions, Chinese lockdowns and the war in Ukraine. But Luca Solca, analyst at Bernstein Research, believes its current valuation is fair due to the potential of the group’s smaller brands.
Saint Laurent was the group’s star performer in the third quarter, with 30 percent organic sales growth. Though revenues were driven by all product categories, Duplaix singled out the success of the higher-priced Icare handbag, launched in the second quarter. The maxi shopping bag in quilted lambskin retails for 3,500 euros.
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