Luxury conglomerate Kering S.A. (Gucci, Balenciaga, Bottega Veneta, and Saint Laurent) has revealed its financial report for Q1 of 2020. Similar to the Q1 report from rival LVMH, the Coronavirus outbreak has quivered revenues streams with a reported shortfall of 15.4 percent.
Gucci, among Kering’s most profitable brands, has witnessed a sale downfall by 22 percent worldwide compared to Q1 of 2019. This has been attributed to the closure of physical stores and suspension of travels, interrupting the essential profits obtained by the Chinese investors. This decline, however, was offset by an increase in online sales, which now counts for 9.5 percent of Gucci’s retail strategy.
Jean-Marc Duplaix, Kering’s chief financial officer remarked that exclusivity will be ever more paramount than before,” as Gucci plans to make further reductions from wholesale. In contrast, one of Kering’s less established brands Bottega Veneta actually saw a growth with a 10.3 percent increase for Q1, which was put down to a 55 percent year-over-year growth from wholesale. Bottega Veneta was recently taken over by Daniel Le, who has tactfully repositioned the brand as a key player in the new wave of Italian craftsmanship, harnessing eco-conscious materials and low-key branding.
While statistics are looking promising, Bottega Veneta’s Q1 track record was reasonably low.
Duplaix also commented further discounts and product mark-downs that are expected for Spring/Summer 2020, as collections begin to pile up in warehouses as a result of shut down stores. He continued, “we know we will face a very difficult second quarter and a challenging year overall, but I can assure you that we are not only adapting to these unexpected circumstances, we are also using these lessons to improve our efficiency, resilience, and agility to emerge better prepared for the future.”