Kering’s Pinault confident on Gucci’s growth, as group revenues up 35%

A row of Gucci “Soho” bags are reflected in a glass display shelf inside a Gucci store in Rome.

Alessia Pierdomenico | Bloomberg | Getty Images

LONDON — The chief executive of French luxury group Kering expects fashion label Gucci to continue to deliver growth for the company this year, following record revenues in 2021.

Speaking to CNBC on Thursday, Francois-Henri Pinault said the fourth quarter for Gucci had been “brilliant.” Parent company Kering reported that the iconic fashion label had delivered revenues of 9.7 billion euros ($11.02 billion), up 31% on 2020.

Kering released its 2021 full-year results on Thursday morning, reporting that revenues had jumped to 17.7 billion euros, up by more than a third on the previous year. The luxury goods group’s recurring operating income jumped 60% versus 2020, topping 5 billion euros.

The luxury goods group said revenue growth was driven by “outstanding” performance from all its fashion houses.

Shares of Kering rose 6.5% during afternoon deals in London.

Focusing specifically on Gucci, Pinault said that while the brand marked its 100th birthday last year, the label was “still being built.”

The launch of a new Gucci collection last year brought in “significant growth” in the final three months of the year, Kering’s CEO said.

Pinault said he believed Gucci’s growth momentum would continue through 2022 and in the coming years.

“We have a very long-term vision for Gucci and it’s delivering as expected and it will continue for sure,” he said.

Pinault was also confident about the growth of the luxury market more broadly. He said that growth hadn’t just been driven by people spending more money on products than experiences amid the coronavirus pandemic.

The number of customers coming into the luxury industry was growing in the likes of Asia and America, he added.

Inflation and the metaverse

Addressing the issue of rising costs, Pinault said that Kering considers price at the beginning of each collection, adjusting it based on factors like inflation, import duties and the foreign currency exchange situation between countries.

However, he added that pricing was also a structural consideration because what is “important to understand for a luxury brand is that the more you grow, the more you need to be careful in keeping your exclusivity, your desirability going forward.”

He said that the average price of Kering products was going up for these structural reasons.

On Wednesday, Reuters reported that fashion label Louis Vuitton, which sits under the rival LVMH group, planned to raise its prices due to increasing manufacturing and transportation costs. 

In terms of acquisitions, Pinault said Kering’s “portfolio of brands is not perfect, so I can improve it significantly going forward,” adding that the group was always actively looking at opportunities.

Pinault also touched on the opportunity for Kering in the metaverse. He said that Kering was considering how the virtual world could potentially disrupt e-commerce, as well as the opportunities in terms of the extension of the group’s products.

Kering has already started to experiment in the space. For instance, Gucci has collaborated with animator Superplastic to create a line of non-fungible tokens.

Pinault said Kering was also looking into how it could accept cryptocurrency as a payment in the future.

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