French luxury conglomerate Kering reported strong sales in its jewellery and watch divisions in 2023 amid sales and profits decline in other segments in “a trying year” as described by the group’s chairman and CEO François-Henri Pinault.
Kering’s jewellery houses include Boucheron, Pomellato, DoDo, and Qeelin as part of a division called other houses. In 2023, revenue from the division totalled €3.5 billion (around $3.77 billion), down 9 percent as reported year-over-year and 8 percent on a comparable basis. Sales from the brands’ directly operated retail stores in the division rose 3 percent, while wholesale sales fell 29 percent. The other houses generated recurring operating income of €212 million (around $229 million) in 2023, while recurring operating margin fell to 6 percent.
While Kering does not break out results individually for brands in other houses, the group said: “Kering’s jewellery houses maintained their excellent momentum, with double-digit growth in the fourth quarter, driven by the success of all collections.”
The group’s 2023 sales totalled €19.57 billion (around $21.09 billion), down 4 percent as reported and 2 percent on a comparable basis, dragged down by a 6-percent drop in sales at its biggest brand, Gucci. Recurring operating income fell 15 percent to €4.7 billion (around $4.92 billion). Operating margin was 24.3 percent in 2023 compared with 27.5 percent in 2022 year on year.
Kering said sales at the stores it owns and operates were stable on a comparable basis, but wholesale sales and other revenue fell 11 percent, as the group continued to divert more resources to its own network of stores.
“In a trying year for the group, we strengthened our organisation and took significant steps to further enhance the visibility and exclusivity of our houses. We are focused on revitalising Gucci, leveraging the unique blend of craftsmanship, Italian heritage, and modernity that characterises this iconic house…In a market environment that remains uncertain in early 2024, our continuing investments in our houses will put pressure on our results in the short term. Thanks to the experience gained across the group through a decade of outstanding expansion, we are confident in achieving our long term ambitions,” said Pinault.
15-02-2024
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