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Jewelry Proves Strong for Kering in 2019

Fashion- and high-jewelry collections have sold well.
Feb 13, 2020 4:35 AM   By Rapaport News
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RAPAPORT... Kering, the owner of high-fashion houses Gucci and Yves Saint Laurent, reported robust sales in its jewelry and watch divisions in 2019, led by a strong performance in the Asia-Pacific region.

“Performance was solid double-digit in jewelry [at] Boucheron, Pomellato and Qeelin,” said Kering CEO François-Henri Pinault in an earnings call transcribed by Seeking Alpha. “Pomellato benefited from good trends in [Asia Pacific], as well as in its Western European stores with a strong success of the Nudo Pink collection."

Sales at Qeelin continued to rise, maintaining strong double-digit growth, he added.

Sales at Kering’s “other houses” segment — which includes jewelry and watches, as well as other fashion products — climbed 20% on a reported basis to EUR 2.54 billion ($2.76 billion) during the year. Revenue at stores that were open a year earlier grew 18%.

The launch of high jewelry in 2019 has proved very successful for Kering, Pinault noted, while fashion jewelry is also performing well. The group is working on a strategy for scaling up its jewelry offering, using product innovation, qualitative distribution and smarter marketing.

“We have significant potential in front of us, including in jewelry,” he added. “After three years of investment, Boucheron is doing very well. So this is, for me, by far, the most profitable growth in front of us, and this is the priority of the group.”

Group sales jumped 16% on a reported basis to EUR 15.88 billion ($17.28 billion), and 13% on a comparable basis. Profit for the period dropped 37% to EUR 2.31 billion ($2.51 billion) as the luxury retailer was hit with one-time charges relating to a tax settlement with the Italian government, which it concluded in May. Group sales were strong across all regions, particularly in Asia Pacific, despite political tensions and disruptions in the second half of the year, which impacted the company’s business, it said. Online sales climbed 14% during the period.

Kering is concerned the current global challenges may affect its sales for 2020, it noted.

“The group’s operating environment remains unsettled with regard to macroeconomic and geopolitical uncertainties, national trade policies, and fluctuations in exchange rates. These uncertainties may be temporarily heightened during major events or crisis, such as the recent coronavirus epidemic, given the impact on consumption trends and tourism flows, and their ability to affect economic growth,” the company said.

Correction, February 26, 2020: An earlier version of this article incorrectly referred to “eye jewelry” due to a transcription error. Kering CEO François-Henri Pinault was actually referring to high jewelry.

Image: A Qeelin jewelry store in Hong Kong. (Shutterstock)
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Tags: boucheron, François-Henri Pinault, gucci, kering, Pomellato, Qeelin, Rapaport News, Yves Saint Laurent
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