French luxury group Kering, owner of brands such as Gucci and Yves Saint Laurent, has once again experienced a year of strong growth. However, the precarious situation in China is causing the French group significant headaches.
Kering realised a 16.2 % turnover increase to 15.88 billion euros. On a comparable basis, growth was at 13.3 %. The group's sales increased in all regions, but Asia remains the growth engine par excellence (+ 20.4 %). Online turnover rose by 22 %.
The operating result increased by almost a fifth to 4.77 billion eurosn a little more than the 4.73 billion analysts had predicted, the Financial Times writes. Nevertheless, net profit dropped by 37.4 % as Kering had to pay a 1.25 billion euros after a dispute with the Italian tax authorities.
Given the uncertain situation in China, the company is not releasing exact forecasts for next year, but just stated that it "continues to have confidence" in its medium- and long-term growth potential. CEO François-Henri Pinault said that it is impossible to estimate the impact of the corona crisis: "I do not want to engage in guesswork... but we expect things to return to normal promptly once the emergency is over. We want to be ready and in a good position when the rebound begins."
Kering has already taken several measures since the outbreak of the crisis, such as reallocating Chinese stocks to other regions and reviewing product launches. About half of the Chinese branches of the luxury group have been closed for the time being, while others have limited opening hours.