Saint Laurent stands out for all the right reasons at Kering
Gucci, which accounts for more than half of French luxury group Kering's revenues, saw a significant slow-down between July and September 2021, leading to a drop in the company's stock on Wednesday. The group's other brands, however, are getting along just fine. Saint Laurent, in particular, continues to report remarkable growth, posting revenues of 659.2 million euros, up 27.8% year over year, or 28.1% on a comparable basis. Compared to the third quarter of 2019, before the company's results were negatively affected by the Covid-19 pandemic, the brand performed even better, achieving a comparable sales increase of 32%.
Saint Laurent notably saw an acceleration in its directly operated sales network, which represents 66% of the brand's total revenues and posted a 31% increase in sales compared to Q3 2020 and a 37% rise compared to the same period two years ago. Third-quarter growth was particularly impressive in North America, where the brand saw an increase of 75%, and in Europe, where growth was 35%, despite the fact that the European luxury market continues to suffer from the absence of tourists. This strength can therefore be attributed to the fact that the label, which is currently piloted by creative director Anthony Vaccarello, is well established in the region and has successfully carried out targeted communication initiatives.
In parallel, Saint Laurent saw its sales rise 2% in its retail network in Asia, 1% in Japan and 37% in the rest of the world. The Asia-Pacific region, where the house's popularity has only strengthened over the last few quarters, thanks to a recent extension of its store network and a good reception from local customers, accounts for 22% of the brand's total revenues, while Japan represents 4%. As observed by Kering CFO Jean-Marc Duplaix during a results call, "the resilience of the Asia-Pacific region has highlighted the growing fame of the brand and the fruits of our efforts in building a Saint Laurent network in the region, where the label still has great potential."
As for wholesale revenues, they increased 22% in the third quarter and were principally related to the delivery of the brand's Fall 2021 womenswear collection. "In line with the best strategy, Saint Laurent is working on making this distribution channel even more exclusive," explained the executive.
During the period, all product categories performed well, each posting double-digit growth when compared to the third quarter of 2019. "Ready-to-wear was able to attract an increasing number of local customers to stores. Carry-overs continue to shine and new products are also doing very well. Overall, it was an extremely positive quarter for Saint Laurent, whose effective local communication and distinctive style translated into solid results," added Duplaix.
The CFO also highlighted how Saint Laurent has managed to develop in a continuous and linear fashion over the last few years, with "a slightly more elevated penetration in certain markets." New store openings have contributed to this growth, but were not the only factor. "From an organic point of view, growth has been very strong in all regions compared to 2019. So, globally, progress is very well-balanced between constant-currency growth and geographical expansion, but that has always been the case at Saint Lauren," concluded Duplaix.
Excluding Gucci and Bottega Veneta, Kering's other brands also saw a strong dynamic in the third quarter, posting total revenues of 843.7 million euros, up 26% from the same period in 2020. In Q3 2019, sales totaled 612.3 million euros. As noted by Duplaix, growth has been "very consistent for the last two years, notably thanks to the continuous expansion of Balenciaga and Alexander McQueen."
According to the CFO, Balenciaga, in particular, has reached the size of Bottega Veneta, the revenues of which stood at 1.07 billion euros on September 30, 2021, all while the brand is still primarily distributed through a network of multibrand retailers and e-commerce. The relaunch of Balenciaga's Haute Couture after a 53-year gap, through a much-lauded collection from Demna Gvasalia, has had an important impact in terms of the brand's perception, explained Duplaix, while also indicating that the label has become less dependent on sneakers and casual pieces than it was in the past, having seen an increase in sales of more formal shoes, ready-to-wear and leather goods.
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