Dive Brief:
- Kering reported a modest 2% year-over-year revenue gain in H1 on Thursday for the period ended June 30. Revenues totaled 10.1 billion euros, or approximately $11.1 billion at current exchange.
- The French group also announced the appointment of Armelle Poulou as CFO, effective Sept. 1. She joined Kering in 2019, and currently serves as director of corporate finance, treasury and insurance.
- The earnings come after Kering announced it acquired a 30% stake in Valentino. The move is part of a larger partnership with luxury investment firm Mayhoola and includes an option for Kering to acquire a 100% stake in the Italian luxury house by the end of 2028.
Dive Insight:
The Valentino deal cost Kering 1.7 billion euros, and in the release about the arrangement, Kering stated that the transaction is “part of a broader strategic partnership between Kering and Mayhoola, which could lead to Mayhoola becoming a shareholder in Kering.”
Valentino currently has 211 directly operated stores in more than 25 countries, per the release, and in 2022 it recorded revenues of 1.4 billion euros. Its current CEO, Jacopo Venturini, was previously executive vice president of merchandising and global markets at Kering-owned Gucci.
The Mayhoola deal comes as Kering second quarter sales showed only 3% growth on a comparable basis, lagging behind rival luxury firms such as LVMH and Richemont. Kering, which in addition to Gucci owns brands including Yves Saint Laurent and Bottega Veneta, has recently seen leadership changes including the departure of Gucci president and CEO Marco Bizzarri last week. Kering Group’s managing director, Jean-François Palus, was appointed to the role for a transitional period.
Gucci’s first-half revenue was up 1% on a comparable basis to 5.1 billion euros, while sales in its directly operated retail network grew 1%, and wholesale revenue dropped 3%, and its recurring operating income totaled 1.8 billion euros for the same period. The brand represented over 50% of Kering’s total revenue in 2022.
Revenue for Yves Saint Laurent’s first-half was up 7% on a comparable basis to 1.6 billion euros, due in part to a solid second quarter sales increase of 7%, which Kering attributed to healthy ready-to-wear and leather goods retail sales. Meanwhile, Bottega Veneta’s revenue was unchanged.
"In the first half, we pursued our investments in our Houses’ desirability and exclusivity,” said François-Henri Pinault, Kering chair and CEO in a statement. “While engaging in critical forward-looking initiatives, we maintained a high level of profitability.”
He added that Kering’s recent acquisition of the Creed fragrance house was part of the overall strategy to expand the firm’s “footprint in the luxury universe” and “accelerate the liftoff of Kering Beauté.”
Pinault also discussed Kering’s executive changes. “Together with the major organizational changes we announced last week to enhance stewardship of our Houses, as well as the many projects we have already launched over the past few months, the developments of the first half strengthen my confidence in Kering’s future prospects,” he said.
Earlier this year, Kering saw a series of high-level departures, including the exit of Gucci senior executives Piero Braga and Robert Triefus in May. Its creative director Alessandro Michele exited late last year.
At the time of last week's announcement regarding Bizzarri’s exit, Jean-Marc Duplaix, who has served as Kering’s CFO since 2012, was appointed deputy CEO in charge of operations and finance. Poulou will continue reporting to Duplaix when she takes on her new role as CFO.
Meanwhile, Francesca Bellettini will now serve as Kering’s deputy CEO in charge of brand development, while continuing to stay in charge at Yves Saint Laurent, where she has served in the role of president and CEO since 2013. All brand CEOs at Kering will report to her.
