By LAWRENCE TAN
Gucci Group’s owners PPR reported a drop of 7.6 percent in sales in the third quarter – from 4.9 billion over the same period in 2008 to 4.56 billion euros.
Bloomberg reports that group sales of the Paris-based luxury goods group missed analysts’ estimates of 4.63 billion euros the newswire polled.
Said François-Henri Pinault, Chairman and Chief Executive Officer of PPR, in press statements announcing the company’s Q3 performance: “PPR faced the convergence in the third quarter of 2009 of several unfavorable factors – a lackluster macroeconomic environment, a high base of comparison in most of our businesses and, in luxury goods, a drop in tourism flows and a low point in wholesale activity.”
In the first nine months of 2009, sales at The Gucci Group were down 5.9 percent, and in the third quarter 10 percent, which made for a considerable comparison with a growth of nine percent in Q3 of 2008.
Emerging countries, which accounted for nearly a third of Gucci’s earnings showed encouraging growth, in particular China and Hong Kong, driven by strong performances in the Group’s 38 directly operated stores.
Directly operated stores in China posted an impressive 33 percent in sales for Bottega Veneta, and Asia-Pacific (excluding Japan) continued to defy the downturn with a 50 percent growth, helping to alleviate sluggish performances of the label in North America and Europe.
The same scenario played out at PPR’s other luxury brands Balenciaga, Alexander McQueen, Stella McCartney, with directly operated stores showing encouraging growth against a challenging wholesale market whereby retailers and franchisees cut inventory.
Yves Saint Laurent posted the steepest drop, recording a 20 percent decline in the third quarter in the backdrop of a 27 percent growth over the same period last year.
Unlike The Gucci Group and Bottega Veneta, YSL did not benefit from a stronger Asia-Pacific presence or its network of directly operated stores. Asia-Pacific only accounts for 14 percent of total YSL sales, and has only 66 directly operated stores worldwide (compared to Gucci Group’s 596 and Bottega Veneta’s 131). In the PPR report, YSL says it will “continue to strategically readjust its store network, focusing on the highest-growth markets”.
via PPR Group