French luxury giants Kering and Hermès reported their respective trading updates for the third quarter, with Kering sales for the three months worse off due to the global luxury slowdown, while Hermès quiet luxury aesthetic bucked the slowdown trend for now.
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Kering, the owner of Gucci, Saint Laurent and Balenciaga brands reported sales of EUR 4.5 billion (USD 4.77 billion), down 13 percent as reported and down 9 percent on a comparable basis, for the three months ending September 30.
By brand, Gucci, the embattled darling of the Parisian group’s portfolio, reported sales of EUR 2.2 billion, down 14 percent as reported and down 7 percent on a comparable basis, as the Italian luxury brand tries to start a new chapter with the recent appointment of creative director, Sabato de Sarno.
Yves Saint Laurent revenue in the third quarter totalled EUR 768 million, down 16 percent, as reported and down 12 percent on a comparable basis, while Bottega Veneta revenue totaled EUR 381 million, down 13 percent as reported and down 7 percent on a comparable basis.
The group’s other brands category, made up of Balenciaga, Alexander McQueen, Boucheron, Pomellato, fell 19 percent as reported, and down 15 percent on a comparable basis, to EUR 805 million.
The only bright spot in the group’s earnings update was Kering eyewear, which totalled EUR 331 million, up 34 percent as reported – due to the contribution of Maui Jim – and up 2 percent on a comparable basis.
The company did not disclose revenues by geographic market.
“Beyond the challenging macroeconomic conditions and softening demand across the luxury industry, the change in our revenue performance in the third quarter reflects the impact of our decisions to further elevate our brands and their distribution,” said François-Henri Pinault, chairman and chief executive officer, Kering.
“The organisation we put in place in July will enable us to strengthen the steering of our houses in the current market environment and to reclaim our positions and influence. With the acquisition of Creed completed last week, one of the world’s most distinguished high fragrance houses has joined our family, propelling our ambitions in beauty onto the next stage.”
Elsewhere, Hermès said sales continued to increase in the third quarter, and reached EUR 3.365 billion, up 16 percent at constant exchange rates, despite a particularly high comparison base in Asia.
By region, Asia excluding Japan continued its strong momentum, up 10 percent to EUR 1.575 billion. Hermès said sales growth was robust in Greater China, Singapore, Thailand, Australia and Korea, even after a strong quarter in 2022, following the lifting of health measures in China. During the quarter, a new Hermés store opened in July in the city of Tianjin in northern China and Petit H stopped over at the Beijing China World store in September.
In Japan, Hermès sales were up 24 percent to EUR 304 million.
“The solid performance in the third quarter reflects the desirability of our collections all over the world, with still a sustained momentum in Asia and in the Americas,” said Axel Dumas, executive chairman of Hermès.
“More than ever, in an uncertain global environment, we are reinforcing our investments and our teams to support growth.”
The Kering and Hermés updates come on the back of lacklustre earnings announcements from luxury rivals LVMH and Ferragamo earlier this month.
Louis Vuitton for the third quarter reported organic sales inched forward just 1 percent for the three months ending September 30, to EUR 19.96 billion (USD 21.17 billion), while Ferragamo reported total sales of EUR 844 million for the first nine months of 2023, down 9.2 percent in constant exchange rates, compared to the prior-year period, signalling a global slowdown in luxury sales.
However, quiet luxury brand Cucinelli managed to clock sales growth like Hermès with revenues for the first nine months amounting to EUR 818.4 million (USD 867.87 million), up 28.8 percent, with double-digit sales growth in area geographic areas.