Sales were up in the first quarter by 5.0 percent for PPR’s Gucci Group in reported terms, to €855 million, but on a comparable basis they were down by 3.4 percent. Comparable sales of leathergoods increased by 2 percent. No details were given for shoes and other product segments, but company officials indicated that jewelry and watches were the luxury items most affected by the current economic crisis. This was also reflected in LVMH’s results (see following story).
Sales in emerging markets, which made up 32 percent of Gucci Group’s total sales for the quarter, were responsible for the overall sales increase. They grew by 21 percent. Revenues jumped by 25 percent in the Asia-Pacific region excluding Japan, driven by strong growth of 13 percent in Greater China. Gucci Group operated a total of 571 stores around the world as of March 2009, including 31 in China.
Instead, the overall environment in mature markets worsened significantly in the quarter. Europe and the U.S. both saw low-single-digit drops, while Japan fell by about 15 percent. PPR is cautious going forward, and said that orders for the Gucci brand were in line with the trends in the first quarter, while orders for Yves Saint Laurent and Bottega Veneta were slightly lower. No major change could be spotted in April.
Among the Gucci Group brands, Gucci saw a 1.0 percent uptick in sales on a comparable basis, or 10.6 percent up in reported terms. PPR said that the brands spring/summer 2009 collections of leathergoods were particularly strong. Emerging markets again put up an impressive performance, with 21 percent growth in sales. Revenues from Greater China, which made up 17 percent of the brand’s sales for this quarter compared with 15 percent last year, increased by 16 percent.
In Western Europe, which still accounts for nearly 29 percent of its revenues, Gucci’s sales softened by 1.5 percent. Japan’s luxury market continued to decline, and sales there fell by almost 16 percent. The Gucci store network comprised 264 units at the end of the quarter, including 25 in China. The brand will continue to focus on building up its presence in this and other emerging markets.
The younger Bottega Veneta brand saw its sales fall by 13.4 percent on a comparable basis and by 2.3 percent in reported terms to €104 million, against a strong quarter in 2008. Sales in Europe fell by 26 percent. At the end of March there were 125 Bottega Veneta directly operated stores around the world.
Yves Saint Laurent’s sales were down by 10.2 percent on a comparable basis and 5.4 percent in reported terms in the first three months of 2009, due to a difficult global environment. The brand’s fashion and leathergoods activities, as well as its royalties, decreased in the quarter. Its most important market, Europe, fell by 11 percent. YSL shoes performed satisfactorily, with growth in the high single digits. YSL has a new high-top sneaker available online in the U.S. and at boutiques elsewhere. It was made in collaboration with Puma.
Sales from the Gucci Group’s “other brands,” which include Balenciaga, Boucheron, Sergio Rossi, Alexander McQueen and Stella McCartney, decreased by 9.5 percent on a comparable basis and by 5.8 percent in reported terms in the first quarter to €124 million. Sergio Rossi suffered from last year’s closure of its stores in the U.S., while Boucheron’s jewelry had a tough time in the market. In total, the “other brands” operated a network of 117 stores at the end of March 2009.
Puma scored a little better than Gucci Group in the quarter. First-quarter sales for the Puma brand rose by 3.6 percent to €697.4 million, according to PPR. This represented a drop of 3.3 percent in constant currencies.
Footwear and accessories were resilient, sporting low-single-digit growth. Apparel didn’t do as well, especially in Western Europe. Puma’s sales in the Americas increased by 11.2 percent in the quarter, fueled by the good performance of its footwear in the U.S. and with exceptional strength also in Latin America, following an adjustment in the assortment and the marketing.
Asia-Pacific sales were down slightly and sank also in the EMEA region from the high levels of last year, when they were boosted by major sporting events such as the Euro 2008 football championships and the Olympics (more in Sporting Goods Intelligence Europe).
In the first quarter, the PPR group as a whole had consolidated sales of €4.8 billion, down by 2.6 percent from the first quarter of 2008 in reported terms and down by 4.9 percent in terms of comparable structures and exchange rates.
The contribution of the group’s activities outside of France continued to increase, representing 63.6 percent of total sales in the first quarter of 2009, vs. 62.4 percent on a comparable basis in the first quarter of 2008. E-commerce grew by 7.0 percent on a comparable basis.
Company officials declined to forecast the group’s performance for the balance of the year, but said they would keep costs under control.