MILAN, Apr 26 (Class Editori) — According to first quarter results of the major luxury brands, the Chinese market —and more generally Southeast Asia— appears in the shade, compared to a strongly recovering international context. Gucci, brand of the Kering Group for which China is one of the main markets, began to record a slowdown in sales in March.
"We started 2022 with a very solid first quarter within an uncertain context, mainly influenced by the tightening of Covid-19 restrictions in China since March," François-Henri Pinault, Chairman and CEO of the company, stated. However, lockdowns in the Eastern market were not enough to hold back giant Kering, which ended the start of the year with a turnover increasing by 27.4% to 4.95 billion euros. Revenues from directly operated stores grew by 23% year-on-year and by 32% compared to the same period in 2019.
"Gucci's strong performance in North America and Europe, however, was overshadowed by its presence in China, where we are strengthening its organization to fully capture the market’s vitality," the CEO concluded. Nonetheless, Kering Group's flagship label reported 2.59 billion euros (+19.5%) of revenues in the quarter.
Another luxury giant EssilorLuxottica confirmed that it was affected by the weakness of the Chinese market, which grew by 1-2 percentage points while, at a group level, consolidated turnover reached +38% to 5.6 billion euros.
Referring to China, Stefano Grassi, the Group’s CFO, stated that "this year the restrictions linked to the pandemic in the country will affect sales mainly in April, while the impact of inflation will be more pronounced in the second and third quarters, although it should normalize by the end of the year".
The Asia-Pacific region, in which China accounts for the lion's share, reported comparable sales of 685 million euros, up by 3.1% at constant exchange rates (+7.3% at current exchange rates) despite the impact of several unfavourable factors affecting the region, with new lockdowns due to Covid-19 in China and Hong Kong, severe flooding in Australia and a new wave of Covid-19 cases hitting India in January.
China reported positive sales through February, with a deteriorating performance in March due to the increasing number of Covid-19 outbreaks and subsequent restrictions. Stellest continued its positive path in the country with exponential growth in units sold. Performance in other markets in the region was characterized by a solid South Asia benefiting from a gradual easing of health restrictions, a solid Japan supported by robust growth in eyewear and AFA, and a solid acceleration in India in the second half of the quarter.
(Source:Class Editori)
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