NEW YORK: Gucci’s sales growth slowed in the third quarter after the coronavirus resurged in parts of Asia, putting more pressure on the label’s new collection to deliver a strong holiday season.
Comparable sales at the Italian brand rose 3.8% from a year earlier, owner Kering SA said in a statement.
That compares with growth of 86% in the second quarter after the lifting of lockdowns drove a rebound.
Analysts had forecast a 9.3% increase in the third quarter.
The performance suffered from virus restrictions, which hindered demand in China, New Zealand, Australia and elsewhere, Jean-Marc Duplaix, Kering’s chief financial officer, said on a call with reporters.
Gucci, which generates more than half of Kering’s revenue, released its Aria collection near the end of last month.
The line, which celebrates the brand’s centennial, features suede jackets and flowery patterns reminiscent of the 70s.
Gucci is particularly reliant on new products driving demand, so shoppers’ reactions are being closely watched.
In a call with analysts, Duplaix said he expects Gucci sales will get a boost from Aria, adding the group is pleased with its pricing strategy and recent sales trends. The line’s product mix is also broader, widening its appeal, Duplaix said.
“The Gucci party is postponed,” Bernstein analyst Luca Solca wrote in a note after the results. Gucci continues to perform behind other “mega brands” such as a LVMH’s Louis Vuitton, he added.
Kering’s sales for the first nine months of 2021 totalled €12.2bil (US$14.2bil or RM59.02bil), surpassing 2019 levels. Saint Laurent posted the best performance during the third quarter, with sales at the Parisian brand surging 28%.
LVMH, the owner of brands including Louis Vuitton and Dior, last week said it is on track to top 2019 revenue levels, showing how rapidly some luxury giants have bounced back. Hermes International will report sales today.
The movie House of Gucci, which recounts the 1995 murder of family heir Maurizio Gucci, is set for release next month.
The film, starring Lady Gaga and Adam Driver, should bring “another halo” to the brand during the holiday shopping season, Claire Roblet, head of investor relations at Kering said during the call.
Another event that will be closely watched is the release of the Gucci and Balenciaga “hacking” collaboration which is due to release next month as well, Roblet added.
The project, which was unveiled in April, features jackets and white suits with both brands’ names and logos on them. — Bloomberg
Source: The Star
