Shoppers line up to enter a Gucci store on Fifth Avenue in New York, U.S., Saturday, May 22, 2021.
Victor J. Blue | Bloomberg | Getty Images
LONDON — The chief executive of French luxury group Kering expects fashion brand Gucci to continue driving growth for the business this year, following record revenues in 2021.
Speaking to CNBC on Thursday, Francois-Henri Pinault said Gucci’s fourth quarter had been “brilliant”. Parent company Kering reported that the iconic fashion brand achieved revenues of 9.7 billion euros ($11.02 billion), up 31% from 2020.
Kering released its 2021 full-year results on Thursday morning, saying revenue jumped to 17.7 billion euros, up more than a third from a year earlier. The luxury group’s current operating profit jumped 60% compared to 2020, exceeding 5 billion euros.
The luxury goods group said revenue growth was driven by the “outstanding” performance of all its fashion houses.
Kering shares rose 6.5% in afternoon trading in London.
Focusing specifically on Gucci, Pinault said if the brand scored its 100and anniversary last year, the label was “still under construction”.
The launch of a new Gucci collection last year led to “significant growth” in the last three months of the year, the Kering CEO said.
Pinault said he believes Gucci’s growth momentum will continue through 2022 and beyond.
“We have a very long-term vision for Gucci and it’s working as planned and it will continue for sure,” he said.
Pinault was also confident about the growth of the broader luxury market. He said the growth wasn’t just driven by people spending more money on products than on experiences amid the coronavirus pandemic.
The number of customers entering the luxury industry was increasing especially in Asia and America, he added.
Inflation and the Metaverse
Addressing the issue of rising costs, Pinault said Kering considers the price at the start of each collection, adjusting it based on factors such as inflation, import duties and the currency situation between countries.
However, he added that pricing was also a structural consideration because what is “important to understand for a luxury brand is that the bigger you grow, the more careful you have to be to retain your exclusivity, your desirability at the future”.
He said the average price of Kering products was increasing for these structural reasons.
On Wednesday, Reuters reported that fashion brand Louis Vuitton, part of rival group LVMH, planned to raise prices due to rising manufacturing and transport costs.
In terms of acquisitions, Pinault said “Kering’s brand portfolio is not perfect, so I can improve it considerably in the future”, adding that the group is still actively looking for opportunities.
Pinault also spoke about the opportunity for Kering in the metaverse. He said Kering was considering how the virtual world could potentially disrupt e-commerce, as well as opportunities in terms of expanding the group’s products.
Kering has already started experimenting in space. For example, Gucci collaborated with host Superplastic to create a range of non-fungible tokens.
Pinault said Kering is also looking at how it can accept cryptocurrency as payment in the future.