French luxury goods conglomerate Kering increased in the first half of this year thanks in part to the weak euro.
The weak euro contributes to an increase in sales at the luxury group Kering. Although growth at its flagship Gucci brand lagged behind those of other divisions, sales of French luxury goods conglomerate Kering increased in the first half of this year thanks in part to the bad performance of the euro.
The company announced on Wednesday that its overall sales increased by 16 percent on a comparable basis and by 23 percent on a reported basis, reaching 9.93 billion euros ($10.04 billion). The difference in these two figures is entirely attributable to the effects of foreign exchange rates.
The company’s net profits came in at 1.99 billion euros, representing a 34% increase compared to the same time period the previous year.
The rate of growth dropped during the second quarter, but Kering stated that strong performance in Western Europe, Japan, and North America more than offset the impact that Covid-19 lockdowns had in China.
In recent years, China has been a primary driver of development for luxury companies, which means that prolonged pandemic interruptions in that market might have a significant negative impact on performance.
Kering did not disclose a breakdown of sales based on geographic location.
Despite the fact that Gucci is Kering’s most successful division and accounts for more than half of total revenues, sales growth at the Italian luxury company was just 15% in reported numbers.
Both Yves Saint Laurent and Bottega Veneta saw significant increases in their sales, with YSL seeing a 42% increase and Bottega Veneta seeing an 18% increase.
Kering was also successful in raising its recurring operating margin, which rose from 28.1 percent to 28.4 percent after an increase of 0.6 of a percentage point.