Sales increases of 9 percent in shoes and 6 percent in other leathergoods in Gucci's own stores did not prevent the most important brand of the Kering group, formerly called PPR, from booking overall growth of only 0.6 percent in the third quarter ended Sept. 30. The brand's own retail sales, which represented 77 percent of the total turnover, rose by 4 percent, but its wholesale revenues went down, especially in Italy, because of more selective distribution policies.
The management of the French group pointed out that Gucci suffered a 2 percent decline in Western Europe, despite good performances in France and the U.K., and that its sales went down at a single-digit rate in Greater China, which has come to represent close to 30 percent of the brand's total sales. Sales of leathergoods to Chinese tourists abroad went up, however.
Nevertheless, Kering's whole Luxury Goods division managed to raise its total sales by 5.6 percent on a comparable basis in the latest quarter, reaching a level of €1,617 million, thanks to better results from many of the other brands in its portfolio. Kering did not mention Sergio Rossi, but gave sales increase on a comparable basis of 16 percent for Bottega Veneta, 12 percent for Yves Saint Laurent and 9 percent for other luxury brands, which include Alexander McQueen, Balenciaga and Stella McCartney in addition to Sergio Rossi and others.
Recently launched lines of handbags and shoes proved highly successful at YSL, which saw its overall sales jump by 41 percent in Japan and by 12 percent both in Western Europe and North America. Sales accelerated at Balenciaga, thanks in part to a strong increase in footwear.
While Kering's Luxury Goods division performed more softly than in the past, its Sport & Lifestyle division suffered a drop of 0.9 percent in its sales on a comparable basis for the quarter, down to €896 million. Problems persisted at Puma, which is going through major transformation process and new management (more in Sporting Goods Intelligence Europe).
All in all, Kering reported revenues from continuing operations of €2,523 million in the latest quarter, up by 3.4 percent on a comparable basis from a year ago, showing a slight deceleration from the first half of 2013. Sales were up by 3.9 percent for the first nine months of the year on an organic basis, with an increase of 7.1 percent in Luxury Goods and a drop of 2.4 percent for Sport & Lifestyle.
These sales results don't include those of La Redoute and other retail companies that Kering is divesting. The company has warned that its profits for the whole financial year will be significantly lower than those of 2012 due to a number of important writeoffs and other charges worth about €300 million, related to the divestiture process and to the reorganization of Puma.