French luxury fashion group Kering has recorded a 9 per cent growth in revenue to US$21.8 billion, after registering a 7 per cent drop in sales in the fourth quarter due to China’s pandemic restrictions and weaker demand in the US.
The rise in the group revenue last year was largely driven by Western Europe and Japan. Net income attributable to the group reached $3.8 billion, up 14 per cent.
“While China was unsurprisingly a large drag, we note that North America performance came in below our expectations at every single brand,” said JP Morgan analyst Chiara Battistini told Reuters.
Sales of its flagship house Gucci was down 14 per cent year on year during the fourth quarter as the business was “significantly affected by the situation in China”. Sales from directly operated stores plummeted 15 per cent during the period.
Meanwhile, the revenue of Yves Saint Laurent and Bottega Veneta rose 4 per cent and 6 per cent respectively during the quarter. Sales of the other brands were down 4 per cent, despite double-digit growth in Western Europe and Japan.
“Beyond the challenges some of our houses faced – notably towards the end of the year – we are convinced that we are pursuing the right strategy for the long term,” said Francois-Henri Pinault, chairman and CEO of Kering Group.
Earlier this month, Kering Group announced the appointment of Raffaella Cornaggia as CEO of Kering Beauté, who will oversee the beauty category for Bottega Veneta, Balenciaga, Alexander McQueen, Pomellato and Qeelin.
Sabato De Sarno was appointed as the house’s new creative director last month, succeeding Alessandro Michele who left the house in November.