|Bid||0.00 x 0|
|Ask||0.00 x 0|
|Day's Range||562.00 - 562.20|
|52 Week Range||400.00 - 680.00|
|Beta (5Y Monthly)||1.20|
|PE Ratio (TTM)||18.31|
|Forward Dividend & Yield||7.81 (1.35%)|
|Ex-Dividend Date||Jan 13, 2020|
|1y Target Est||N/A|
Gucci owner Kering is in talks to buy Italian ski wear maker Moncler for $12 billion. Yahoo Finance’s Oscar WIlliams-Grut shares the latest developments on On The Move.
The coronavirus outbreak has kept as many as 1,000 Chinese fashion buyers from Europe’s top fashion shows this month as the luxury industry faces its biggest threat since the 2008 financial crisis. China has become all-important to the global luxury and fashion industries as a driver of sales and a core manufacturing hub. Chinese consumers accounted for roughly 40 per cent of the €281bn spent on luxury goods globally last year, according to Jefferies, but drove 80 per cent of the growth, powering sales increases at companies such as LVMH and Kering.
PARIS — Ever since Kering revealed last year that it was back in the market for acquisitions, speculation has been swirling over potential takeover targets, but chairman and chief executive officer François-Henri Pinault on Wednesday ruled out a takeover of Moncler.Speaking after the French fashion house reported better-than-expected fourth-quarter results, Pinault said he maintained regular contact with Moncler chairman, ceo and shareholder Remo Ruffini, but clarified the conversations were linked to the Fashion Pact, the industry-wide environmental initiative spearheaded by Kering.“There is nothing on the table. We know each other, we appreciate each other,” Pinault said.Moncler shares rose sharply in December following a Bloomberg report that Kering was holding exploratory talks to buy the Italian maker of down-filled jackets.Ruffini said at the time that he held regular talks with investors and other sector participants, including Kering, to explore strategic potential opportunities for Moncler. “At the moment, there is not any concrete hypothesis under consideration,” he added.While rival LVMH Moët Hennessy Louis Vuitton closed last year with the $16.2 billion acquisition of Tiffany & Co., the sector’s biggest deal ever, Kering has frustrated investors who would like it to be less reliant on its cash cow brand Gucci, which accounted for 60 percent of the group's revenues and 82 percent of profits last year.Pinault disputed that rationale. “I have no balancing issue,” he said, arguing that Gucci’s presence created a virtuous circle for the group’s other brands.Though Kering plans to focus on organically growing its existing houses, which include Saint Laurent, Balenciaga and Bottega Veneta, Pinault said it remains in the market for acquisitions, although he ruled out direct competitors, companies below a certain size, and watchmakers.“I don’t want any brand competing directly with my existing brands. I would be destroying value in doing so. In terms of product category, price segment on the market or style, we are always assessing the opportunities that could come on the market based on that. We’re not passive but we’re still very, very selective,” he said.Confirming for the first time that Kering dropped out of the bidding for Versace in 2018 because the $2.1 billion price tag was too high, Pinault said he had not been priced out of a deal since. “We haven’t been confronted with a situation where we were interested and we lost out on buying a brand because of the price,” he said.With a free cash flow of 1.52 billion euros, after settling its Gucci tax dispute with Italian authorities, and its remaining stake in German sporting goods firm Puma, Kering has the means to pursue midsized acquisitions, said Piral Dadhania, analyst at RBC Capital Markets.“Alternatively, management have also suggested they are open to elevated cash returns to shareholders,” he added.More from WWD * Bulgari Opts Out of Baselworld's Upcoming Edition * Kering Reins Back Spending in China, But Sees Quick Recovery * Moncler 2019 Profits, Sales Up, Chief Addresses Coronavirus
(Bloomberg) -- Want the lowdown on European markets? In your inbox before the open, every day. Sign up here.Gucci’s quarterly sales beat estimates as French luxury group Kering’s biggest brand overcame slumping sales in Hong Kong. Investors largely brushed aside concerns about the effects of the coronavirus.The Italian label’s fourth-quarter sales rose 11% on an organic basis, Kering said Wednesday, growing nearly as much as the previous quarter following a year of deceleration. Analysts had predicted 8.6% growth at the brand.The shares rose as much as 3.9% early Wednesday in Paris before paring gains. Kering said it has closed half of its stores in mainland China due to the coronavirus -- even more than rival Burberry Group Plc. It’s impossible at this time to fully evaluate the impact of the outbreak on business, Chairman Francois-Henri Pinault said on a conference call.Gucci’s fourth quarter was “remarkable,” in light of headwinds from political protests in Hong Kong and a higher sales tax in Japan, Chief Financial Officer Jean-Marc Duplaix said. Kering’s sales fell as much as 50% in Hong Kong as pro-democracy protests prompted mainland Chinese to cancel shopping trips to the financial hub.Ramped up marketing investments in the U.S., including client outreach and greater visibility in department stores, helped Gucci return to growth in that market. The brand’s U.S. business had turned negative in the middle of the year amid fewer visits from Chinese tourists and as the brand faced criticism for advertising a sweater seen by some consumers as resembling offensive blackface imagery.Stabilizing growth at Gucci could be seen as a success for Kering, which had long promised to deliver a “soft landing” at its flagship brand after several years of breakneck growth.Other BrandsAs Gucci steadily cooled off compared with the nearly 40% growth of 2018, other brands in the Kering stable have helped pick up the slack. Sales of Bottega Veneta’s signature woven-leather shoes and handbags, which got a new look last year under British designer Daniel Lee, jumped 9.4% in the final quarter. Saint Laurent continued to grow by double digits throughout the year.Still, Kering’s fortunes remain highly dependent on Gucci, which makes up about 80% of profit. Pinault has been facing questions from investors on whether the group plans to seek out acquisitions, such as a puffy-coat maker Moncler SpA, to balance the group’s portfolio.Pinault said on the call Wednesday that “there’s no active project on the table in terms of M&A,” and the company’s priority is on organic growth in the brands. He said there was “nothing on the table” with Moncler.“We’re very demanding when it comes to M&A -- we won’t buy because something is available on the market,” he said.Like other luxury companies, Kering is also confronting the effects of the coronavirus, which began spreading at a faster rate after the quarter ended. The stores in mainland China that remain open are operating on reduced hours, Kering said on the call. The company is also postponing marketing spending as much as possible in China and reallocating inventory to other markets.“Knowing how dynamic and resilient the Chinese people are, we expect things to return to normal promptly once the emergency is over,” Pinault said.(Updates with comments from Pinault on M&A and coronavirus starting in ninth paragraph)To contact the reporter on this story: Robert Williams in Paris at firstname.lastname@example.orgTo contact the editor responsible for this story: Eric Pfanner at email@example.comFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
PARIS — Kering has scaled back its investment and activities in China as a result of the coronavirus, but expects Chinese consumers to bounce back quickly once the epidemic is under control.With half of its stores in China closed and the other half operating with shorter opening hours, the luxury group is redirecting inventory to other regions, reviewing product launches, pushing back store and pop-up openings, and postponing social media campaigns.François-Henri Pinault, chairman and chief executive officer of Kering, said it was impossible to evaluate the impact of the coronavirus and how fast businesses will recover, but he remained confident about his group’s prospects in the medium and long term.“I don’t want to engage in guesswork, but based on past experience and knowing how dynamic and resilient the Chinese people are, we expect things to return to normal promptly, once the emergency is over, and we are already working on the next steps,” he said Wednesday.Pinault spoke after Kering posted better-than-expected growth in the fourth quarter, powered by strong sales in the Asia Pacific region.It capped a year that saw the group set several milestones: revenues rose above 15 billion euros for the first time, Saint Laurent topped the 2 billion-euro mark, and sales at Balenciaga were “significantly” above 1 billion euros. In another first, Kering’s operating profit margin crossed the 30 percent threshold.Pinault said the group’s performance in the first three weeks of 2020 was “absolutely exceptional,” but was impacted beginning Jan. 24, after China imposed travel bans to curb the coronavirus outbreak.Praising Chinese authorities for their response to the epidemic, Pinault said Kering has implemented measures for its staff in China such as making masks mandatory, screening their temperature daily, disinfecting offices and stores every two hours, and providing taxis for employees so they don’t have to use public transport.With editors, buyers and influencers from Asia expected to sit out the upcoming round of European ready-to-wear shows, Kering’s star brand Gucci expects 30 percent fewer guests at its fall display in Milan, scheduled for Feb. 19, Pinault said.However, Kering, the owner of brands including Saint Laurent, Balenciaga and Bottega Veneta, does not plan to implement any special safety measures at its shows in Milan and Paris, he added. “If any Chinese guests would like to come to our shows, they are welcome, to be very clear, and they will even be seated next to me,” he said.Touting the group’s flexible Italian production chain, he said production of carryover styles for the upcoming pre-fall collections might be delayed until the situation in China normalizes. Although Balenciaga produces some sneakers in China, he did not see any impact from supply bottlenecks there.Chinese consumers account for slightly more than 30 percent of overall revenues at Kering, broadly in line with the luxury sector as a whole, and sales in Mainland China grew by more than 30 percent in the fourth quarter, even as revenues in Hong Kong plummeted 50 percent due to ongoing violent antigovernment protests.“Overall, the Chinese cluster continued to grow significantly in Q4,” said Pinault, expressing confidence that Kering will weather the crisis and continue to grow. The group is stepping up outreach efforts to local customers in Western Europe to compensate for the drop in tourists from China.“We have extremely good prospects for each of our brands. The fundamentals of the luxury industry remain very strong, independently of these periodic events, so we remain very confident in our capacity to continue developing our activities in the future,” he explained.Chief financial officer Jean-Marc Duplaix sounded a slightly more cautious note.“It’s very difficult to predict today what could be the trends for the coming months, so of course we can imagine that if the trends witnessed since last January continue in February and in March, a negative outcome is not out of the question for the whole industry, for all the brands and of course for Gucci,” he warned.Group revenues in 2019 were up 16.2 percent year-over-year to 15.88 billion euros, a notch above in percentage terms of sector leader LVMH Moët Hennessy Louis Vuitton, which last month reported a 15 percent rise in full-year sales.Net profit from continuing operations rose 15.1 percent to 3.21 billion euros, while recurring operating margin increased to 30.1 percent from 29.2 percent the previous year. Group sales were up 13.6 percent to 4.36 billion euros in the three months to Dec. 31, beating analysts’ forecasts.Revenues at Gucci, Kering’s cash cow brand, rose 10.5 percent on a comparable basis in the fourth quarter, exceeding consensus estimates for an 8.8 percent increase. This was broadly stable versus the third quarter, when sales rose 10.7 percent, and down from 28.1 percent during the same period a year ago.The brand has seen its annual comparable growth rate plummet to 13 percent in 2019 from 37 percent in 2018 and 45 percent in 2017. However, Pinault said Gucci still has plenty of room to grow. “Gucci is in a position, over the long run, to outperform significantly the industry,” he predicted.As part of its radical transformation under creative director Alessandro Michele and ceo Marco Bizzarri, the brand has renovated 60 percent of its stores worldwide. The remaining 40 percent should be overhauled in the next two years, leading to productivity gains, Pinault said.Gucci this week opened a restaurant on Rodeo Drive in Los Angeles as part of its ongoing collaboration with critically acclaimed chef Massimo Bottura, and another Gucci Osteria will open in Tokyo in the next few months, the executive revealed.The brand has turned around a lackluster performance in the U.S., where it has weathered a scandal over a sweater that critics said evoked blackface, thanks in part to its Gucci Pin pop-ups, selling capsule lines like the GG Psychedelic Collection or the Mickey Mouse collaboration celebrating the Chinese Lunar New Year.And Michele is broadening his potential audience with launches like the recent 1955 handbag, and his spring 2020 collection, which marked a departure from his signature baroque style. “It’s true that we’re not only growing with the Millennials, but we’re also growing with the more mature clientele going forward,” Pinault said.In addition, the executive noted the brand has room to expand in categories such as jewelry, following the launch of its first high-jewelry collection last year, and beauty. Despite the successful launch of Gucci’s lipstick line last year, Pinault lashed out at licensee Coty Inc. for failing to capitalize fully on the segment.“The potential is absolutely huge and we are quite frustrated by the speed at which this potential is being exploited,” he said, noting that Saint Laurent, which is five times smaller than Gucci in terms of revenues, has a bigger beauty business under its license with L’Oréal.Saint Laurent saw an acceleration in the fourth quarter, with comparable sales up 14 percent following a 10.8 percent increase in the previous quarter. The brand has been underrepresented in China, where it opened its first flagships, in Shanghai and Beijing, last year.Pinault said the French fashion house, which has a network of 222 stores, would add another 20 this year. It will expand its rtw offering with more daywear and entry-price point pieces, and is boosting its shoe collections.“We have grown it to over 2 billion euros last year, and we will continue to grow it, first to 3 billion and then further, and we will do it carefully, without veering from what constitutes its essence,” he said.Bottega Veneta also picked up steam in the fourth quarter, with organic revenues up 9.4 percent, following a 6.9 percent increase in the third quarter. Pinault said the brand was reaping the benefits of its overhaul under creative director Daniel Lee, with new products accounting for 60 percent of its assortment in the fourth quarter.“We couldn’t be happier with the way Bottega Veneta is responding to its reinvention strategy,” said Pinault, noting Lee scooped four awards at the Fashion Awards in London in December: brand of the year, accessories designer, British women’s wear designer and designer of the year.“I really do consider that it’s a new start for the brand, and the brand has the potential to grow very significantly in the near future,” he added.“In a very short amount of time, we have built an entirely new aesthetic, once closely associated to a single leather good design. This also led us to reorganize Bottega Veneta’s manufacturing processes, resulting in some product delays, but these are gradually being resolved,” he said.While Bottega’s sales were up just 2.2 percent in comparable terms in 2019, to 1.17 billion euros, Pinault noted that included a high level of discounted sales which would not be reproduced this year. “The beginning of the year was very impressive at Bottega in terms of full-price sales,” he noted.“There is still much to be done to consolidate this transformation, and we shouldn’t expect growth to be linear, particularly in the early stages, but the past six months have been very encouraging,” he concluded.Piral Dadhania, analyst at RBC Capital Markets, was positive on the outlook for the group.“Kering remains a key holding in our luxury coverage. Its brand portfolio (particularly in soft luxury) is strong, and whilst Gucci has a disproportionate weight on sales and EBIT, we see potential in some of the other assets such as Bottega Veneta and Balenciaga on a medium-term view,” he said in a research note.“Investments and significant progress in recent years of the Kering corporate platform (logistics, digital, personnel, retail network) set the business up well to continue nurturing assets, in our view,” Dadhania added.More from WWD * Kering Quashes Talk of Moncler Acquisition * Bulgari Opts Out of Baselworld's Upcoming Edition * Gucci Unveils Restaurant on Rodeo Drive
Gucci-owner Kering has temporarily shut half of its stores in China, and shelved new openings and advertising campaigns there, as the coronavirus outbreak throws luxury brands into turmoil. The French group, which also owns Saint Laurent and Balenciaga, remained upbeat about its longer-term prospects as it beat fourth-quarter sales forecasts on Wednesday. "We are seeing a sharp drop in traffic and sales in mainland China," Chairman Francois-Henri Pinault said, adding shops that remained open, including in Hong Kong, were on reduced hours.
PARIS — As sustainability battles heat up across the fashion industry — from fast fashion to luxury — Kering has forged ahead with its environmental profit-and-loss account, reporting it lowered its environmental impact by 14 percent between 2015 and 2018.Drafting and publishing the system for tallying the environmental cost of its activities has been key to establishing Kering as an authority on sustainability issues, and it has topped a number of corporate rankings on the subject, including several times at the head of the Dow Jones Sustainability Index for its category.The group said it’s on a “positive trajectory” to reach its 40 percent reduction in environmental impacts by 2025.“The results are very promising,” said Marie-Claire Daveu, speaking at a press conference presenting the report, on the sidelines of the ChangeNow summit at the Grand Palais in Paris. The company gathered its own executives as well as those from other organizations, and Plug and Play to talk about its progress and areas to improve. Samples of materials like certified, sustainable wool from New Zealand, organic silk and viscose with a Forest Stewardship Council certification were on display at the back of the room — from Kering’s Material Innovation Lab.“Kering was the first profit-and-loss [report] out there, I think it was quite difficult — wasn’t it? — to produce these results, to stand up and say in our supply chain, we’ve got some challenges to face,” said Mark Gough, chief executive officer of Natural Capital Coalition, an association of companies with an environmental focus.“It’s now an international standard…very much based on the work that Kering has done,” he said, noting that companies in other sectors are similarly using EP&L reports.Kering cited progress in other areas, including reducing the intensity of its greenhouse emissions by 77 percent, and sourcing only "responsible" gold for its watches and jewelry division. It has reached 88 percent of traceability for key raw materials, with a goal of reaching 100 percent by 2025.Kering executives said the EP&L report has helped identify areas where improvement is needed.“When I joined the fashion industry, people were thinking about the store and the impact of the lights of the store, we thought about that…but we’ve gone way deeper into the supply chain — that’s where over 66 percent of the impacts are, in the raw materials, and half as much again, into the transformation of the raw materials into what we’re wearing,” said Michael Beutler, director of sustainability operations at Kering.Christine Goulay, sustainable innovation senior manager, outlined the company’s plans to provide its watches and jewelry business with support to find new materials, noting that scratch-resistant sapphire glass used for watches uses a of heat and energy to produce.The company in November launched a road show tour with analysts and investors in France and the U.K. focused on its environmental, social and governance criteria, offering evidence that interest in the subjects is gaining ground with investors.More from WWD * Gucci Joins the Lion's Share Fund * Versace Pledges Donation to Chinese Red Cross Foundation * Saint Laurent Museum to Spotlight Muse Betty Catroux
PARIS/MILAN, Dec 5 (Reuters) - The chief executive and top shareholder of puffer jacket maker Moncler played down speculation around a takeover by Gucci-owner Kering on Thursday, saying the two firms sometimes talked but that there was no deal in the works. Shares in the Italian label, which has become a luxury industry darling in recent years after a makeover under CEO Remo Ruffini, surged earlier after Bloomberg reported that it had held exploratory discussions with Kering.
European stocks mostly rose on Thursday, with the exception of U.K. equities, as multinationals suffered from the continued run-up in the British pound.
PARIS/MILAN (Reuters) - The chief executive and top shareholder of puffer jacket maker Moncler played down speculation around a takeover by Gucci-owner Kering on Thursday, saying the two firms sometimes talked but that there was no deal in the works. Shares in the Italian label, which has become a luxury industry darling in recent years after a makeover under CEO Remo Ruffini, surged earlier after Bloomberg reported that it had held exploratory discussions with Kering.