French fashion label Saint Laurent saw sales reach €408 million in the first quarter of 2018, equivalent to a 19.6 percent rise, as Japanese revenues hit double-digit growth, and Asia-Pacific sales soared mainly due to growth in Hong Kong.
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The second-best brand performer for the Kering group, sitting behind Italian label Gucci, Saint Laurent’s retail sales accounted for 63% of the Parisian label’s first-quarter total revenue.
By market, Japanese sales surged 23 percent, on the back on increases in Chinese tourism to the archipelago nations, as well as an uptick in Asia-Pacific sales, witnessing a soaring 24% growth, kicked on by sales in Hong Kong.
Saint Laurent’s Asian markets, as well as North America, which saw the biggest gain of 27 percent in the three months, offset a decline in Western Europe, falling 1 percent for the quarter.
Habitually posting increases of 20 percent growth or more each quarter, Saint Laurent’s first quarter performance did indeed fall short of industry expectations, prompting Kering group’s CFO, Jean-Marc Duplaix to respond.
In a conference call last month, Duplaix pinned the slow-down of Saint Laurent’s performance on the high percentage growth benchmark built by the brand over the years, coupled with a decrease in European tourism.
“We come from several quarters of strong growth in Europe. In the last three years, we posted growth rates between 29 percent and 46 percent. To explain the current performance, we must take into account this strong positive trend, combined with a decrease in tourist visits across Europe. Our local clientèle is always there, a solid and encouraging presence. We shouldn’t focus on Europe alone. Chinese customers (who account for nearly one third of the world’s luxury goods market) have shifted their purchases back towards other regions, especially Asia-Pacific,” said Duplaix.
In terms of sales generated by region, Asia-Pacific made up 29 percent of Saint Laurent’s total sales for the quarter, with Europe contributing 36 percent of revenues, and North America and Japan accounting for 21 percent and 8 percent, respectively.
During the quarter, Saint Laurent opened six new stores in Asia and North America, reaching a total of 190 directly operated stores worldwide. Meanwhile, in 2018, the label is planning about twenty new store openings across the globe.
“[Saint Laurent CEO] Francesca Bellettini was very clear and transparent about the fact that the growth of Saint Laurent would be also driven by a broadening of the retail network, considering there are regions where we have not yet reached the level we would wish for the brand,” added Duplaix.
“And you can rely on Francesca and her team for keeping track of what is happening in the various regions and for taking the appropriate measures to foster comparable sales growth.”
In 2017, the Kering group, which owns Saint Laurent and Gucci, among other luxury brands, recorded €1.502 billion in revenues, up 23 percent on the year prior.