Gucci seems to have finally come out of the doldrums. The big luxury brand owned by Kering recorded a 4.8 percent sales increase on a comparable basis in the fourth quarter of 2015, when the first apparel and footwear collections created under the leadership of the new artistic director of the brand, Alessandro Michele, represented 30 percent of Gucci's turnover.
Introducing its results, which showed increases of 16.4 percent in euros and 4.1 percent in constant currencies last year for its whole Luxury division, the group noted that the total personal luxury goods market grew by less than 2 percent at constant exchange rates last year. It mentioned an estimate that shoes were again the fastest-growing category, rising by 4 percent to an estimated €16 billion. It said they have been outperforming leathergoods since 2012 because they allow consumers to buy a status symbol at a lower price.
For all of 2015, Gucci's sales grew by 0.4 percent on a currency-neutral basis, reaching €3.89 billion, although its recurring operating profit declined by 2.2 percent to €1,032 million. Shoes represented 14 percent of its turnover. The brand's regained momentum is being supported by the current launch of a completely revisited gucci.com website in Europe, the United Emirates and Australia. The new reactive platform was already launched in North America last October, triggering a good response.
Footwear made up 6 percent of Bottega Veneta's turnover, reaching €1.28 billion. The brand's total sales declined on a comparable basis because of its stronger exposure to the increasingly difficult markets in Greater China. The group has decided to develop the brand more strongly in more mature markets.
Shoes had a higher share of 17 percent of Saint Laurent's sales of €974 million. Continuing the progress of the last few years, the brand's total revenues grew by 26 percent and its operating profit jumped by 60 percent to €169 million.
Overall, the Luxury division improved its operating profit by 2.5 percent to €1,708 million on sales of €7.86 billion. Led by Puma, Kering's Sport & Lifestyle division raised its sales by 5.9 percent on a comparable basis, reaching a level of €3.68 billion, but its operating profit fell by 31.1 percent to €94.8 million (more on this and the sale of the Electric brand in Sporting Goods Intelligence Europe).
Kering's total revenues rose by 15.4 percent to €11.6 billion last year, with a 4.6 percent increase on a currency-neutral basis, with sales in emerging countries declining to 36.8 percent of the global figure. Sales rose by 9.9 percent in Western Europe, by 9.4 percent in Japan and by 3.2 percent in North America, but they were down by 0.9 percent in Asia-Pacific.
The operating margin before amortization (Ebitda) of the group fell to 17.8 percent from 19.8 percent in the previous year, with 95 percent of the profit coming from luxury goods. The group's net profit increased to €696 million from €529 million.