Following a Business Recovery in the Second Half, Kering Group Says its ‘Ready to Leverage the Rebound’

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PARIS—Kering Group (PARIS: KER), the global luxury group overseeing fashion brands Gucci and Saint Laurent, reported overall consolidated revenue for fiscal 2020 of €13,100.2 million, a drop of 17.5 percent on a reported basis and 16.4 percent on a comparable basis, according to an announcement. The group reported sales of €15,883.5 million in 2019. In its eyewear business segment (which it includes under the “corporate and other” breakdown), sales totaled €487.1 million in 2020, down 17.6 percent on a comparable basis.

After being hard hit by store closures in the first half, particularly in travel retail, revenue for Kering Eyewear recovered in the second half, with a decline of 8.6 percent, the company reported.

On the expense line, Kering noted that its net expenses in the corporate and other segment totaled €231.9 million in 2020, “an improvement of €31.8 million year on year, thanks mainly to Kering Eyewear, which delivered positive and higher recurring operating income in the year.”

In addition to noting that Kering Eyewear achieved an improving revenue trend in the second half, the company noted that it has made a “further extension of its brand portfolio with the addition of Chloé and Dunhill” for spring-summer 2021. The first collection has been available since January. Kering also has launched its “flagship store on Tmall to further establish Kering Eyewear on the Chinese market.”

A “strict discipline on corporate costs” led to Kering Eyewear increasing its EBIT contribution to the group, while in 2021 capital expenditures will be “driven by continued investment in logistics and technology.”

Overall for the fashion group, Kering reported EBITDA of €4,574.2 million for fiscal 2020, a decline of 24.1 percent compared with €6,023.6 million in 2019.

“In a year of disruption, Kering demonstrated remarkable resilience and agility,” François-Henri Pinault, chairman and chief executive officer, said in the announcement. “We achieved a solid top-line recovery in the second half, we protected our margins while continuing to invest in our houses and growth platforms, our cash flow generation remained elevated, and we further strengthened the Group’s financial structure.”

He added, “More than ever, I am convinced that our strategy and business model are perfectly in sync with the current and future trends of the luxury universe. We are emerging from the crisis stronger and better positioned to leverage the rebound. We invest in all our brands to maximize their potential, and to resume our profitable growth journey.”

The fashion group noted that 2020 sales generated by its retail network fell 15.9 percent on a comparable basis, which it attributed to store closures and the halt in tourism,” but Kering noted a “sharp rebound in the second half led by North America and Asia-Pacific.”

In addition, Kering noted that it achieved a “further sharp acceleration in online sales,” which rose 67.5 percent, and accounted for 13 percent of total sales generated by the retail network.