Gucci, Saint Laurent storm ahead in Q4: Bags are key

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What’s the big question we want the bosses over at Kering to answer? Yes, that’s right: Just what kind of impact is the Alessandro Michele factor having on Gucci sales?

The company has just reported its Q4 and full-year results and given that there was real Michele-driven product in the stores for Q4 (rather than the Giannini-Michele hybrid we had in previous quarters), we’re itching to know the answer.

Well it seems to be working. The company said Gucci saw a return to growth in Q4, with a 13% rise and a 4.8% increase in comparable sales driven by directly operated stores in both mature and emerging markets. It was clear that the performance accelerated throughout the year as 2015’s overall comp sales rise was only 0.4%. For the year, Gucci revenues reached nearly €3.9bn.

Michele’s appointment to the creative helm just over year ago electrified Gucci and critical acclaim for his collections really does seem to be filtering through to customers in-store.

And the company’s other brands turned in strong performances too (some of them even stronger than Gucci’s).

Bottega Veneta has been seeing powerful growth for some time and last year it was “solid”, the company said, though growth was more moderate. It varied by region and quarter but maintained a very high level of profitability. Sales reached almost €1.286bn in 2015 with a 3.2% comp sales rise.

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Yves Saint Laurent (which has its own questions to answer about whether Hedi Slimane is set to move on or not) once again recorded “very robust revenue growth” across all product categories. Sales came in just under the €1bn mark in 2015 after a massive 25.8% comp sales rise.

Kering’s ‘Other’ Luxury brands (Stella McCartney, Alexander McQueen et al) generated overall sales growth of 20% year on year and 3.1% on a comparable basis.

Revenue growth for the Couture & Leather Goods brands was particularly strong throughout the year, while sales for the Jewellery brands also rose sharply, fuelled by very high business volumes in Q4. But the Watches brands were once again held back by an unfavourable market environment, despite picking up steadily quarter after quarter.

Bags, belts and wallets

So if watches struggled, what exactly did Kering’s basket of luxury brands sell? Well, 53% of sales last year were for leathergoods, 16% ready-to-wear and a surprisingly-low 12% was made up of shoes. Watches and jewellery made up 10% of sales. It just goes to show that, despite the intense media focus on ready-to-wear, the real sales story for these brands is all about bags, belts, wallets and key fobs!

That’s what a lot of Gucci’s customers really want to buy, whether they’re in Milan, New York or Macau.

Local customers

So where were they in 2015? Growth for the group’s Luxury brands was highest in its traditional, more mature markets, particularly for the directly operated store network. Driven by high tourist numbers and steadily rising sales to local customers, luxury activities posted a very strong revenue increase of 13% in Western Europe and a third year of strong growth in Japan, with revenue up 13.7% on a comparable basis. With the exception of Latin America, sales in emerging countries were more mixed, with Asia Pacific once again exposed to poor market conditions in Hong Kong and Macau.

It’s significant that Kering said it’s seeing “steadily rising sales to local customers” because a lot of other customers are reporting strong sales largely to tourists in mature markets. That fact that Gucci, Bottega, Saint Laurent and more are connecting with Italians in Italy, Britons in the UK, the French in France and Americans in the US bodes well for the future as dents in tourists sales shouldn’t hurt Kering as much as some other companies.

One thought on “Gucci, Saint Laurent storm ahead in Q4: Bags are key

  1. Pingback: Gucci AW16: The accessories key items |

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