PARIS, Oct 19 (Reuters) - French luxury group Kering's star
fashion brand Gucci grew sales by just 3.8% in the third
quarter, missing analyst expectations as the pace of recovery
from COVID-19 slowed down sharply, particularly in Asia,
following a bumper second quarter.
Luxury goods groups have bounced back strongly from the
fallout of the health emergency, lifted by pent-up demand for
high-end wares as lockdowns ease across the world and consumers
return to socializing.
However, shopping by traveling tourists - a key source of
revenue for the sector - remains well below pre-pandemic levels.
Overall sales at Kering rose by 12.2% on a
comparable basis, which strips out the effect of acquisitions
and currency fluctuations, a touch above an analyst consensus
forecast for an 11% increase.
The group flagged a strong performance in the United States
and improving sales in western Europe but a resurgence of
COVID-19 cases in late July and August weighed on revenue in the
key Asia-Pacific region, where Gucci sales were down 3%.
The label, which accounts for more than half of annual
sales, has been losing steam compared to some rivals after years
of stellar growth, becoming the main focus for investors.
Analysts had expected revenue at Gucci to rise by 9% in the
three months to end-September after an 86% surge in the previous
quarter. By comparison, LVMH's fashion and leather
goods division, home to Louis Vuitton and Dior, posted a 24%
increase in third-quarter sales.
Kering's finance chief, Jean-Marc Duplaix, told reporters
the group expected Gucci's growth to accelerate in the fourth
quarter after its new Aria collection, which includes a broader
array of products than previous collections, hit stores in late
"We expect a very intense end of the year," he said, noting
the collection had been well received in markets around the
He added the group was looking to support the brand with
investments in events, communication, stores and recruitment,
efforts that would hit the brand's margin growth in the second
Sales of smaller fashion labels Yves Saint Laurent and
Bottega Veneta grew briskly over the quarter, led by
double-digit growth in North America and Europe, while their
performances were also more muted in the Asia-Pacific region.
Asia has been a key growth driver for the luxury sector, in
particular China which is being closely watched by luxury
investors concerned that government measures aimed at reducing
the wealth gap and slower economic growth could dampen appetite
for high-end goods.
(Reporting by Mimosa Spencer, editing by Silvia Aloisi and