By Silvia Aloisi and Mimosa Spencer
PARIS (Reuters) -Sales at French luxury group Kering nearly doubled in the second quarter as coronavirus curbs were relaxed in much of the world, with its star fashion label Gucci accelerating sharply and hoping to capitalise further on its centenary year.
The luxury goods industry has rebounded sharply since the beginning of the year, fuelled by strong demand in Asia and the United States, with Kering rivals like Louis Vuitton owner LVMH also benefiting.
Kering said on Tuesday comparable revenues leapt 95% in the three months to the end of June on a year earlier, and were 11% higher than their pre-pandemic, 2019 levels. Total revenues reached 4.16 billion euros ($4.92 billion).
At its Gucci brand, which accounts for more than half of group revenues and 76% of operating profit, sales leapt 86% year-on-year, picking up pace from the previous quarter.
After cutting marketing spending and fashion shows in 2020, Gucci is catching up on its 100th anniversary, keeping the buzz around the brand high with events and new collections, including one presented in April where Gucci designs were crossed with silhouettes and logos by Balenciaga, another Kering brand.
That collection is likely to hit stores at the end of the third quarter, while the launch of a Gucci-based Ridley Scott film “House of Gucci”, with Lady Gaga, Adam Driver and Al Pacino, is expected to give additional visibility to the brand around the key holiday season later this year.
Kering finance chief Jean-Marc Duplaix told reporters the group would continue to invest to support its brands in the second half of the year, at a time when cash-rich luxury goods conglomerates are ploughing funds into marketing and events.
Duplaix said this would not come at the expense of profitability.
“Demand for our brands remains strong,” he said, echoing rival LVMH.
Kering’s free cash flow from operations more than tripled in the first half to a record 2.4 billion euros.
Asked about mergers and acquisitions, Duplaix said the company would be “realistic and agile”. He added, however, that Kering was not in the process of selling its watch division, following media speculation about a potential management buyout.
“At this stage there is not a sale process in place,” he said, lauding the division’s restructuring efforts that have entailed streamlining products and distribution at labels Girard Perregaux and Ulysse Nardin.
“We are very satisfied with the performance of our brands,” he said.
($1 = 0.8454 euros)
(Reporting by Silvia Aloisi and Mimosa SpencerEditing by Sarah White and Mark Potter)
