Source: Gucci

On April 21, French Kaiyun group, which owns Gucci, Balenciaga and other luxury brands, released its new quarterly financial report.

In the first quarter of 2022, Kaiyun group’s revenue increased by 27% to € 4.956 billion, and its comparable sales increased by 21.4%. In contrast, the group’s revenue in the fourth quarter of 2021 was € 4.188 billion, a year-on-year increase of 12.2%. The fashion and leather Department of LVMH group, the parent company of Louis Vuitton, recorded an increase of 30% in the first quarter, and Hermes also increased by 33%.

Kaiyun group’s brands recorded double-digit growth in the quarter. Core brand Gucci’s comparable sales increased by 13.4% to € 2591 million, contributing the most revenue to the group, but less than analysts expected.

Gucci’s performance has been like a roller coaster in the past year. After recording an increase of 86.1% in the second quarter of 2021, it fell back to 3.8% in the third quarter and rose to 31.6% in the fourth quarter. The rebound of the epidemic in China this quarter had an impact on the performance. Sales in Asia fell by 6%, while sales in North America and Europe increased by 31% and 71% respectively.

Barclays estimates that nearly a third of Gucci’s sales come from the Chinese market. Claire roblet, director of financial communication and market intelligence of Kaiyun group, said that about 40% of Gucci stores in China were affected by the epidemic, of which 10% were suspended in the last two weeks of March.

Jean Marc duplaix, chief financial officer, said that Gucci’s structural adjustment and marketing activities in China would be postponed, but Laurent cathala, the new president of fashion business in Greater China, would take office as scheduled in June. This is part of Gucci’s recent large-scale personnel adjustment. Previously, the brand updated the candidates for the positions of executive vice president and brand general manager, global chief commodity officer and global chief marketing officer of ready to wear.

From the performance of the new quarter, the recovery of performance in the fourth quarter of 2021 is related to the high consumption enthusiasm in the holiday season. In addition, gucci held many marketing activities such as Shanghai Fashion Show and Los Angeles Fashion Show in the second half of 2021, and received a lot of traffic due to the release of the film Gucci family, which increased the exposure.

After creative director Alessandro Michele took charge of Gucci for seven years, the market’s enthusiasm for the brand has changed significantly. Alessandro Michele brings Gucci back to the high growth track with new style and marketing means, but over time, consumer aesthetic fatigue inevitably begins to appear.

From the fourth quarter of 2021 to the first quarter of 2022, Gucci’s sales proportion in Kaiyun group decreased from 56% to 52%. Saint Laurent became the best performing brand in revenue in the first quarter, up 43% to 739 million euros. Among them, the Asia Pacific market increased by 15%, and the European and American markets increased by 100% and 77%.

The income of baodiejia, which is still in the transition stage, increased by 20.8% to 396 million euros. The Asia Pacific market showed zero growth, while the Japanese market increased by 28%. European and North American markets accelerated their recovery from the epidemic, with quarterly growth rates of 65% and 42% respectively. New creative director Matthieu Blazy’s first series will go on sale in the fall.

Saint Laurent and baodiejia belong to the second tier brands of Kaiyun group. Compared with baodie’s various means of digital marketing, Saint Laurent has focused more on expanding its sales network in the past few years. Park Choi young, a member of the Korean women’s group blackpink, brought social media exposure to Saint Laurent. Reuters reported that the brand will increase investment in marketing and communication in the future.

Covering Alexander. Revenue from the “other brands” division of brands such as McQueen, Balenciaga and bosilon increased by 35.5% to 973 million euros. Alexander. McQueen and Balenciaga have received more investment from the group in recent years, began to adopt the marketing means of appointing star spokesmen and overseas shows, and accelerated the pace of opening stores, especially large flagship stores.

As a key supporting department, Kaiyun glasses business also disclosed its performance for the first time in the financial report, and the overall revenue increased by 60.5% to 308 million euros.

After taking back the manufacturing and distribution business of its brand glasses, Kaiyun glasses group established Kaiyun glasses Department and was responsible for the glasses business of Cartier and other brands. After being determined as the new development focus, Kaiyun glasses announced the acquisition of Lindberg, a Danish luxury glasses brand, in 2021, won Maui Jim, an American high-end sunglasses manufacturer, and gradually began to establish its own luxury glasses brand matrix.

Fran ç OIS Henri Pinault, CEO of Kaiyun group, focused on the performance of Saint Laurent, “other brands” department and Kaiyun glasses business at the financial report meeting, and said that he would increase investment in Gucci in the Chinese market. He did not give an expectation for the business performance in the next quarter, but said he would invest in all brands while paying attention to the geopolitical and economic situation.